After a week in the Arizona wilderness (if you have the means, I highly recommend it), we're back in the city where nothing is clear. The month-long Cold War on Wall Street continues, but trading this morning was providing some signs of detente.

The session opened with a tenuous advance that gained strength as the morning progressed. The tone of trading was solid, evinced by advance/decline indicators. Meanwhile, merger news inspired a variety of cyclical names. Still, some traders were hesitant to make big bets (or anticipate how the day will end), what with

Federal Reserve

Chairman

Alan Greenspan

scheduled to address

Congress

tomorrow and Wednesday.

The

Dow Jones Industrial Average

lately was up 146 to 9486, near its highs of the day, after jumping higher around 10:30 a.m. EST following a hesitant first hour of trading.

American Express

(AXP) - Get Report

was the Dow's biggest gainer, followed by

Wal-Mart

(WMT) - Get Report

and tech components

IBM

(IBM) - Get Report

and

Hewlett-Packard

(HWP)

.

Meanwhile,

Eastman Kodak

(EK)

and

United Technologies

were moving on separate merger news.

'I'm not saying it's up, up and away but it's better than it was,' said Scott & Stringfellow's Richard Dickson. 'The bugaboo is leadership. We need something outside of technology to sustain leadership.'

Eastman Kodak was lately up 3.7% on news that Germany's

Heidelberger Druckmaschinen

is in talks to buy the firm's office imaging business. United Technologies was recently down 0.7% to 124 5/8 -- well off its early decline to as low as 120 1/2 -- on word it is buying

Sundstrand

(SNS)

for $4.3 billion. Sunstrand was lately up 17.2%. Other firms moving on M&A include

Southern Union

(SUG)

up 10.8% on news it has made an unsolicited $32 a share offer for

Southwest Gas

(SWX) - Get Report

, which was up 6.1%.

The

Nasdaq Composite Index

was up 32 to 2316, having traded as low as 2275.60 in the early going. Weakness in

Microsoft

(MSFT) - Get Report

restrained the index initially, but the software giant was down just fractionally as lunchtime beckoned on Wall Street. The

Nasdaq 100

was up a relatively modest 1.3% as some of technology's biggest gainers -- notably

Gateway

(GTW)

and

Advanced Micro Devices

(AMD) - Get Report

-- reside on the

New York Stock Exchange

.

Internet names were higher as well and also building strength as the day unfurled.

TheStreet.com Internet Sector

index was up 15 to 486 while

The Street.com E-Commerce Index

was higher by 3 to 97.

E*Trade

(EGRP)

, an E-Commerce Index component, was lately up 15.1% following a favorable write-up in

The Wall Street Journal

, which speculated the online trader could be in the acquisitive sights of

Goldman Sachs

.

The

S&P 500

was up 22 to 1261 while the

Russell 2000

was higher by 5 to 397, reflecting the solid breadth indications.

"So far today, things are doing OK. Breadth is fairly decent and volume is a little light, but that's not to worry," said Richard Dickson, technical analyst at

Scott & Stringfellow

in Richmond, Va. "If we close above 9400 on the Dow you'll definitely hear people talking about a breakout," with 1250 the comparable level for the S&P 500.

The technical picture is improving, Dickson said, noting an increase in negative sentiment in terms of more put buying and other sentiment indicators. He also pointed to a decrease in the IPO calendar, which aids the liquidity picture. "I'm not saying it's up, up and away but it's better than it was," he said. "The bugaboo is leadership. We need something outside of technology to sustain leadership. I'm betting on the growth stocks," namely consumer staples, drug makers, food and health care.

In NYSE trading, gainers were leading declining stocks by a healthy 1,836 to 989 on 380 million shares. In

Nasdaq Stock Market

activity, advancers were leading by a slimmer 1,947-to1,717 spread on 449 million shares. New 52-week lows were ahead of new highs on both exchanges, by 42 to 26 on the NYSE and by 60 to 29 on the Nasdaq.

'Some Really Cheap Stocks Out There'

Traders were pleased by the action, but unwilling to say the early strength confirms the market's recent reticence has ended.

"I think it's just a reaction to the mergers and takeover, particularly in industrial groups and other beaten down, nontech and nonfinancial sectors," said one veteran trader. "There are some really cheap stocks out there. People are waking up to the fact there are sectors out there other than tech and financials."

The trader, who requested anonymity, said the performance of

Asarco

(AR) - Get Report

typifies the action. "There's nothing going on," but the copper giant was lately up 6.1% after

Barron's

reported the stock trades at its biggest discount to book value in history, he observed. Additionally, formerly moribund cyclical names such as

Benton Oil

(BNO) - Get Report

and

Comstock Resources

(CRK) - Get Report

were among NYSE percentage leaders; the

Morgan Stanley Cyclical Index

was lately up 1.5%.

The market "looks like its in pretty good shape," the trader said, noting financial and technology names are participating. But he dismissed the notion a leadership shift to cyclical names will inaugurate a new leg of the bull market.

"The sectors getting attention attract value players and they don't drive the market. Momentum drives the market," he said. "Value players pick away at stocks while it's the momentum guys that have millions to buy and keep buying. Maybe it keeps a floor on some things but I don't think it's going to drive stocks to 12,000."

Among other indices, the

Dow Jones Transportation Average

was up 2.2%, led by

FDX

(FDX) - Get Report

, higher by 3.6% on news that it incurred lower-than-expected expenses during talks with its pilots union. Airlines were also higher amid ongoing consolidation speculation and an upgrade of

Delta Air Lines

(DAL) - Get Report

by

Donaldson Lufkin & Jenrette

. The

Amercican Stock Exchange Airline Index

was lately up 1.7%.

Elsewhere, the

Dow Jones Utility Average

was up 0.5% and the

American Stock Exchange Composite Index

was higher by 1%.

The price of the 30-year Treasury bond was up 10/32 to 98 11/32, its yield dipping to 5.36%.

Monday's Midday Movers

By Heather Moore
Staff Reporter

Gateway was up 5 3/16, or 7%, to 77 15/16 after

Piper Jaffray's

Ashok Kumar upgraded the stock to strong buy from buy and raised its price target to 95 to 100 from 56 a share. The analyst also upped his first-quarter earnings estimate to 90 cents a share from 59 cents and his 1999 forecast to $3.87 from $2.82. In a report, Kumar said the aggressive expansion of Gateway's Country Stores, which focus on consumers and small to medium-sized businesses, will help the PC maker offset a seasonal slowdown. Late Friday, Gateway said it selected Advanced Micro Devices as its second supplier of chips. AMD was up 1 1/2, or 8.5%, to 19 1/8 while

Intel

(INTC) - Get Report

, Gateway's first supplier, was up 1 13/16 to 129 15/16.

In other news:

Beyond.com

(BYND) - Get Report

was up 1 11/16, or 6.8%, to 26 1/2 after announcing it's acquiring

Buydirect.com

, an online software retailer, for about $134 million. Beyond.com expects to complete the transaction by the end of March.

Biomatrix

(BXM)

was up 4 1/4, or 9%, to 51 3/4 after the

Food and Drug Administration

granted the company approval to ship

Synvisc

, which is used to treat osteoarthritis of the knee, from its new 55,000-square-foot manufacturing plant in Ridgefield, N.J.

E*Trade, the focus of today's Heard on the Street column in

The Wall Street Journal

, was up 6 1/16, or 15.1%, to 46 1/4 after launching an online mutual fund. Elsewhere in online news from the

Journal

,

America Online

(AOL)

was up 7 7/8, or 5%, to 168 3/16 after the newspaper said its

CompuServe

unit is expected to unveil a major makeover of its online offerings.

KN Energy

(KNE)

was up 13/16 to 22 5/16 after

Sempra Energy

(SRE) - Get Report

agreed to acquire the company for $1.8 billion in cash and stock. The deal calls for Sempra to assume $4.2 billion in KN Energy debt. Sempra was off 1/4 to 22 1/16.

Qualcomm

(QCOM) - Get Report

was up 6 3/16, or 9.6%, to 71 after the

Journal

said it and

Ericsson

(ERICY)

are close to a deal that would end a long-running patent dispute and could aid in resolving a looming international trade conflict over the future of wireless communications. Ericsson was up 15/16 to 27 9/16.

Rambus

(RMBS) - Get Report

was up 10 1/8, or 14.3%, to 81 3/8 after

BancBoston Robertson Stephens

lifted the stock to buy from attractive with a price target of 90 a share.

Warburg Dillon Read

initiated coverage with a strong buy.

Riddell Sports

(RDL)

was up 7/8, or 15.9%, to 6 3/8 after announcing it will create

RiddellSports.com

, a joint venture with

Data Broadcasting

(DBCC)

and

Dawntreader Fund I

, to market the company's brands on the Web. Data Broadcasting was down 3/16 to 14 1/8.

Southwest Gas was up 1 5/8, or 6.1%, to 28 1/4 after saying it received an unsolicited $32-a-share acquisition offer from Southern Union. Southern Union was up 1 15/16, or 10.8%, to 19 7/8.

Sundstrand was up 10, or 17.2%, to 68 on news United Technologies is buying the company for $4.3 billion. UTX was down 1 7/16 to 124.

TheStreet.com

wrote about a burst of activity in Sundstrand options

Friday.

Earnings/revenue movers

Comcast

(CMCSK)

was up 4 7/16, or 6.3%, to 75 1/4 even after posting a fourth-quarter loss of 47 cents a share, excluding gains, wider than both the eight-analyst forecast for a loss of 15 cents and the year-ago loss of 21 cents. Perhaps investors were paying attention to the cable company's operating cash flow, which shot up 15% during the quarter.

Marshall Industries

(MI)

was down 3 11/16, or 19.1%, to 15 5/8 after warning it sees third-quarter earnings of 14 cents to 17 cents a share due to weaker-than-expected demand and continuing industry-wide pressures on pricing and margins. The four-analyst outlook called for 30 cents

Mirage Resorts

(MIR)

was up 1, or 5.3%, to 19 3/4 even after recording fourth-quarter earnings of 20 cents a share, 2 cents below the 23-analyst view and behind the year-ago 26 cents. Investors seemed to be focusing more on upgrades of the company to buy from market perform from

BT Alex. Brown

and to buy from hold from

NationsBanc Montgomery Securities

.