Major Indices Close Slightly Lower as Internet Sector Gets Hammered

The Treasury market also took a tumble.
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The Internet sector helped pull the

Nasdaq Composite Index

into the toilet in a session marked by light volume and lousy breadth.

Dragging

TheStreet.com Internet Sector

index down the most was

Yahoo!

(YHOO)

, which was down 5 3/4 to 121.

Volume was weak on both the

New York Stock Exchange

and the

Nasdaq Stock Market

.

Treasuries tumbled. Upcoming supply and the continued hangover of Friday's robust

employment report

weighed on Treasuries.

Expectations on Wall Street are for the

Federal Open Market Committee

to hike interest rates later this month. Some market participants are also worried that

Greenspan

& Co. may not stop with just one rate hike.

Oil service stocks skyrocketed. The

Philadelphia Stock Exchange Oil Service Index

soared 6.1%. Gold mining stocks also shined. The

Philadelphia Stock Exchange Gold and Silver Index

surged 5.7%.

On the NYSE, decliners beat advancers 1,801 to 1,189 on 679.3 million shares. On the Nasdaq, losers beat winners 2,211 to 1,657 on 744.8 million shares.

On the NYSE, 213 issues set new 52-week lows while 58 touched new highs. On the Nasdaq, 98 issues set new 52-week lows while new highs totaled 42.

On the Big Board,

AT&T

(T) - Get Report

was most active, with 18 million shares changing hands. It was down 13/16 to 50 7/8.

The New York Times

reported today that Ma Bell and

America Online

(AOL)

are considering an arrangement that would diminish the role of

Excite@Home

(ATHM) - Get Report

by giving AOL and maybe other Internet providers enhanced access to AT&T's systems. However, this afternoon Ma Bell reiterated its commitment to Excite@Home and denied it was in talks regarding a pact with AOL. AOL was up 13/16 to 85 9/16.

On the Nasdaq,

MCI WorldCom

(WCOM)

was most active, with 32.8 million shares changing hands. It was down 3 7/8 to 77 7/16. MCI WorldCom announced the MCI 5 Cents Everyday program, under which callers who pay $1.95 a month would be charged 5 cents a minute on all residential state-to-state long-distance calls made between 7 p.m. and 7 a.m. on weekdays and all day Saturday and Sunday, along with weekday daytime calling for 25 cents a minute. Under another plan, MCI 5 Cents Everyday Plus, the cost would be 5 cents a minute from 7 p.m. to 7 a.m. and 10 cents a minute for weekday daytime calling for a monthly fee of $4.95.

MCI WorldCom also announced plans to target more than $100 million of capital spending this year to build Internet hosting centers and expand existing facilities.

Market data above are preliminary. Updated numbers and analysis will follow in the Market Roundup

Earlier...

3:27 p.m.: Major Indices Hover Near Unchanged as Oil Service Sector Surges

Black gold! Texas tea! The

Philadelphia Stock Exchange Oil Service Index

gushed up 5% as investors pumped life into a sector they feel is ripe for recovery.

2:10 p.m.: Despite Negative Breadth, Stocks Remain Slightly Higher

Despite continuing weakness in the Treasury market which has sent the yield on the benchmark 30-year Treasury bond up to 6.23%, major stock proxies were slightly higher.

1:21 p.m.: Midday Musings: Interest-Rate Worries Keep the Clamps on Stocks

11:52 a.m.: Stocks Strengthen Modestly at Noontime

Heading into the lunch hour, stocks continued to trade in a narrow range with major market gauges mostly higher, while the 30-year Treasury bond was taking a hit.

11 a.m.: Major Indices Still Grinding Their Gears

Major market averages have traded in a relatively narrow range so far this morning and around midmorning were mixed, while the 30-year Treasury bond continued to get whacked.

9:58 a.m.: Firm Open Quickly Turns Mixed as Bonds Plunge

Stocks were mixed early on after a firmer open in the wake of the slump

Friday off the stronger-than-expected July

employment report

.