Market Players Embrace the Muddle of a Calmer Day

The major indices are showing little conviction in either direction, but that has weary Wall Streeters relieved.

Author:
Eileen Kinsella
Publish date:
Apr 19, 2000 1:04 PM EDT

Strong earnings reports fought with cautious sentiment for control of the markets today, but stocks were mixed at midsession.

Major indices opened lower and then spent the morning swinging around break-even, unable to decide whether to take a breath after a turbo-charged two-day rebound or take a cue from strong earnings reports. The

Nasdaq Composite Index

was lately up 38 1/2, or 1%, to 3832, after yesterday's record-breaking 254-point gain helped the tech-laden index along in recovering from

Friday's sharp selloff of almost 9.7%. The

Dow Jones Industrial Average

had even less conviction, lately off 16 1/2, or 0.2%, to 10,751 after hovering near break-even most of the morning.

"People seem tired," said Tim Grazioso, manager of Nasdaq trading at

Cantor Fitzgerald

. The number of tech heavyweights that made positive earnings and outlook reports certainly combine to add a better tone to the market, he said, but there are still people taking profits after two very strong days on the Nasdaq. "Any time you have correction like last week, people proceed with caution," said Grazioso.

Last night,

Qualcomm

(QCOM) - Get Free Report

Inktomi

(INKT)

and

America Online

(AOL)

all released upside earnings.

TheStreet.com Internet Sector

index was up 18 1/2, or 2.2%, to 855. The small-cap

Russell 2000

was up 7, or 1.4%, to 493, while the

S&P 500

index gained a more modest 2, or 0.1%, to 1443.

Debate continues about the validity of the recent rebound after last week's damage. Adam Wagner, president of

Wagner Hermann & Herbst

in Houston, viewed the selloff as situational and not based on fundamentals but said the comeback is more of the same. "Earnings are strong, strong, strong," he said. "Everyone keeps saying we are above the levels we were in October," he said. "Well, we should be. We don't need to revisit any of the support levels."

Still, some see today's cautious tone as a much-needed break on the heels of what may have been an over-ambitious rebound. "The Comp was in an oversold condition but it came back on fire instead of a gradual rebound," said Peter Da Puzzo, president of Cantor Fitzgerald. "It just went too fast and people used up a lot of cash that was on the sidelines. A lot of people completely missed the rebound," he said adding that he would view it as healthy if the markets faded or closed a bit lower today. "That's what I would like to see, more gradual action. You can't write the script."

Despite the rise in the Comp, the biggest drags on the Dow were coming from

Intel

(INTC) - Get Free Report

and

IBM

(IBM) - Get Free Report

whose better-than-expected earnings reports were overshadowed by concerns about revenue from the tech bellwethers.

Financial stocks were falling a bit after earnings reports gave the sector a mild boost earlier this week.

Citigroup

was down 2 1/4 (from the New York close) to 60 1/8, and weighing on the Dow about 11 points, while

Chase

undefined

was slipping 3 1/8 to 77 3/8. The

Philadelphia Stock Exchange/KBW Bank Index

was down 2.6%.

Stronger-than-expected earnings from a number of airlines was lifting the transportation sector higher. Today it was good news from United Airlines parent

UAL

(UAL) - Get Free Report

and

Alaska Air

(ALK) - Get Free Report

, while

Delta Air Lines

(DAL) - Get Free Report

reported upside earnings yesterday. The

American Stock Exchange Airline Index

was up 4.5%, while the

Dow Jones Transportation Average

advanced 1.9%.

In the bond market, the 10-year Treasury was up 5/32 to 103 14/32, its yield at 6.03%, while the 30-year Treasury was up 16/32 to 105 9/32, yielding 5.87%.