It's a delicate house of cards, this market, and the threat of a crumbling ace of spades -- interest rates -- sent stocks and bonds whistling downward.

Inspired by a

Wall Street Journal

article saying the

Federal Reserve

is now biased toward tighter monetary policy, the bellwether 30-year Treasury bond's yield spiraled past the psychologically crucial 6% level to 6.07%. That, in turn, sent stocks reeling lower. Worst hit were transports and techs, with the

Dow Jones Transportation Average

down 109.35, or 3.1%, to 3448.67 and the tech-studded

Nasdaq Composite Index

down 48.65, or 2.6%, to 1820.31.

The

Dow Jones Industrial Average

declined a relatively modest 146.97, or 1.6%, to 8917.64, having bottomed around 2:45 p.m. EDT down 223.70 at 8840.91. Oil stocks

Chevron

(CHV)

and

Exxon

(XON) - Get Report

mitigated the Dow's losses as crude oil prices rose on refinery problems, and

General Motors

(GM) - Get Report

and

McDonald's

(MCD) - Get Report

gained as well. The rest of the Dow fell, led on the downside by

Merck

(MRK) - Get Report

and

J.P. Morgan

(JPM) - Get Report

as drug and financial stocks suffered.

The broad

S&P 500

surrendered 21.36, or 1.9%, to 1086.54, and the small-cap

Russell 2000

lost 11.82, or 2.5%, to 468.50. Among other indices, the

Dow Jones Utilities Average

dimmed 3.24, or 1.2%, to 276.76 and the

American Stock Exchange Composite Index

fell 12.86, or 1.7%, to 729.00.

Equity volume was a bit stronger than normal as market breadth hit its most negative levels since the Oct. 27 minicrash.

New York Stock Exchange

decliners whupped advancers by 2,866 to 319 on 686 million shares. New Big Board lows beat new highs by 105 to 16, the first time since January that lows have outpaced highs. On the Nasdaq, 3,685 decliners blasted 984 advancers on 803 million shares. New Nasdaq lows topped new highs by 89 to 66.

"Looking at the internal conditions of the market, this is the start of a sustained downturn if we close with worse than a 4-to-1 negative advance/decline ratio on the New York Stock Exchange," said Dan Ascani, president and director of research at

Global Market Strategists

in Gainesville, Ga. Today's nearly 9-to-1 negative split is "one of the largest negative advance/decline ratios coming a few business days after a new high that we've ever seen. That is significant according to our work."

Ascani said he expects the market to make a near-term bottom in mid-May, followed by a brief summer rally. But he said the market's days of easy run-ups are over for now. "We believe that money managers were willing to look at the first quarter positively and buy U.S. stocks despite the Asian crisis," he said. "But given the Asian crisis and Fed tightening, that's just too much."

Of course, the Fed isn't actually tightening yet. That's what worries Larry Rice, chief investment strategist at

Josephthal

. "If this is what they're going to do on a little bit of rumor, what are they going to do with a lot of facts?" he said. "You get a couple of upticks in interest rates, a couple of upticks in inflation and it's all over. It's not all over yet."

Rice does expect to see a rebound in the market, but he expects it to be a low-quality bounce. "It'll rally, but I'll tell you one thing: It'll be a rally of 50 to 100 stocks only," he said. "You won't see any better breadth. If I see the same old big stocks going up again, it's just another opportunity to sell."

Rice has been adhering for months to his view of the market as occupying an extremely overvalued space in an overall bull market. Now, with interest rates shaky, he sees even fewer reasons for confidence in most stocks. "The only thing anyone's grasping at these days to continue to buy stock is, they're looking at '99 numbers," he said. "And that's the biggest joke of all. How anyone can know what the '99 numbers are going to be is beyond me."

Elsewhere in North American equities, the

Toronto Stock Exchange 300

plunged 138.47, or 1.8%, to 7564.77 and the Mexican

Bolsa

plummeted 176.46, or 3.5%, to 4909.77.

Monday's Company Report

By

Heather Moore
Staff Reporter

(

Earnings estimates from First Call; new highs and lows on a closing basis unless otherwise specified

.)

Almost nothing was spared in today's selloff, with tech, financial and airline stocks among the hardest hit.

Weighing on the Nasdaq were

Intel

(INTC) - Get Report

, down 2 to 80;

Microsoft

(MSFT) - Get Report

, down 1 3/4 to 90 5/16; and

Dell

(DELL) - Get Report

, down 1 15/16 to 74 5/16.

Fueled by a report in London's

Sunday Telegraph

about a potential merger with

American International Group

(AIG) - Get Report

,

American Express

(AXP) - Get Report

managed to end the day a virtual financial anomaly, slipping only 1/4 to 101 5/8. AIG gave up 2 5/16 to 129 3/16. Meanwhile,

Chase

(CMB)

lost 1 7/16 to 132 5/8,

Citicorp

(CCI) - Get Report

lost 5 9/16 to 149 5/8 and

BankAmerica

(BAC) - Get Report

lost 4 to 80 5/8.

The skies were no friendlier than the corridors of commerce:

Delta

(DAL) - Get Report

sank 4 7/16 to 112 15/16;

US Airways

(U) - Get Report

sank 4 1/8, or 5.6%, to 69 9/16;

AMR

(AMR)

sank 5 5/16 to 146 3/4; and

UAL

(UAL) - Get Report

sank 2 5/16 to 87 5/16.

Earnings reports and previews

UICI

(UICI)

dived 6 1/16, or 18.1%, to 27 1/2 after saying on Friday that it expects to report first-quarter earnings below the year-ago 44 cents per share. The three-analyst prediction calls for a profit of 49 cents. The company said its managed care products unit will produce losses in the first and second quarters.

Vital Signs

(VITL)

gave up 3 1/8, or 15.3%, to 18 1/16 after saying an accounting change will cause the company to report second-quarter earnings about 4 cents below the two-analyst expectation of 31 cents per share.

Justin Industries

(JSTN)

flew 1 5/8, or 11.3%, to 16 1/8 after the company's CEO told

Barron's

he had "no quarrel" with the single-analyst 1998 earnings estimate of $1.08 per share and 1999 estimate of $1.21 per share.

Cincinnati Bell

(CSN)

rose 2 7/8, or 8.5%, to 36 13/16 after announcing first-quarter earnings of 36 cents per share, above the seven-analyst forecast for 33 cents and the year-ago 35 cents. The company is also spinning off its billing and customer-management businesses into a separate subsidiary, dubbed

Convergys

.

Harnischfeger

(HPH)

sank 1 5/8, or 5.4%, to 28 1/2 after announcing that it has discovered "cost overruns and possible accounting irregularities in its Beloit Corp. subsidiary, limited to four large, ongoing projects in Indonesia." The company estimates that it will take an extra $100 million charge.

Oxford Health Plans

(OXHP)

took in 1/2 to 16 15/16 after reporting a first-quarter loss of 37 cents per share, beating the 19-analyst prediction for a loss of 64 cents. In the year-ago period, the company made 42 cents.

TheStreet Recommends

JDA Software

(JDAS)

skidded 1 1/4 to 51 3/8 after reporting first-quarter earnings of 26 cents per share compared with the six-analyst estimate of 24 cents and the year-ago 18 cents. The company also filed for a 2.4 million-share offering.

CANTV

(VNT)

rocketed 2 1/4, or 59%, to 6 1/8 after signing a year-long agreement with a

Johnson & Johnson

(JNJ) - Get Report

unit to market and promote selected Neoprobe products in America. Johnson & Johnson slipped 1 1/4 to 69 3/8.

Fluke

(FLK)

sailed 7 5/16, or 31.5%, to 30 1/2 after

Danaher

(DHR) - Get Report

agreed to buy it for $33.39 per share, or $625 million. Blaming softness in Asian markets and production problems, Fluke also said fourth-quarter earnings will come in 25% to 30% below the three-analyst prediction of 44 cents per share. Danaher stumbled 4 1/4, or 5.8%, to 69 9/16.

CorporateFamily Solutions

(CFAM)

sank 4 3/8, or 14.6%, to 26 after agreeing to merge with

Bright Horizons

(BRHZ)

in a stock swap to form

Bright Horizons Family Solutions

. Bright Horizons shareholders will exchange each share owned for 1.15 shares of the new company. Shareholders of CorporateFamily Solutions will exchange each share owned for one share of the new company. Bright Horizons rose 1 to 27 3/8.

Yurie Systems

(YURI)

rose 3 5/8, or 11.7%, to 34 3/4 after

Lucent Technologies

(LU)

agreed to buy it for $1 billion in cash or $35 per share. Lucent gave up 1 7/16 to 71 15/16.

Vitalink Pharmacy Services

(VTK)

gained 1 11/16, or 8.5%, to 21 1/2 after agreeing to merge with

Genesis Health Ventures

(GHV)

in a deal valued at about $690 million. Vitalink's shareholders can choose either $22.50 per share in cash or $22.50 in Genesis convertible preferred stock per share. Genesis decreased 15/16 to 24 13/16.

Bank of New York

(BK) - Get Report

lost 1/4 to 58 7/8 after

Mellon Bank's

(MEL)

board rejected the company's $24 billion takeover offer yesterday. Bank of New York says that though it will not launch a hostile bid for Mellon, it will take its case to the bank's shareholders. Mellon fell 3 11/16 to 71 5/16.

Offerings and stock actions

Best Buy

(BBY) - Get Report

skidded 7/8 to 67 7/8 after setting a 2-for-1 stock split payable on May 26 to shareholders of record May 11.

Analyst actions

Caribiner

(CWC)

plummeted 8 1/2, or 30.9%, to 19 after

Merrill Lynch

cut it to near-term neutral from buy and to long-term accumulate from buy.

PaineWebber

downgraded the company's stock to attractive from buy and

Bankers Trust Alex. Brown

lowered it to buy from strong buy. On

Friday afternoon, Caribiner said it will report second-quarter earnings below expectations.

FPA Medical Management

lost 1 3/8, or 10.4%, to 11 15/16 after

Credit Suisse First Boston

cut it to hold from buy.

Guidant

(GDT)

vaulted 2 1/4 to 63 7/8 after

UBS Securities

raised it to strong buy from buy.

Compaq

(CPQ)

lowered 1 to 28 1/16 even after

Piper Jaffray

raised it to buy from neutral with a $40 per share price target.

PhyCor

(PHYC)

lost 5/8 to 22 1/4 after

Wheat First Union

downgraded it to outperform from buy. The company also announced it is changing its policies regarding amortization of its intangible assets and adopting a maximum of 25 years as the useful life for amortization of its intangible assets.

Warner-Lambert

(WLA)

added 1 7/8 to 186 after Merrill Lynch upgraded it to near-term buy from accumulate.

Miscellany

PLC Systems

(PLC) - Get Report

soared 5 1/2, or 44.4%, to 17 7/8 after a

Food and Drug Administration

panel recommended approval of the company's new heart laser device.

K-tel

(KTEL)

swelled 7 7/8, or 29.4%, to 34 3/4 after

TV Media Holdings PTE

agreed to market the company's K-tel Express online service worldwide.

Olsten

(OLS)

tumbled 15/16, or 6.6%, to 13 3/8 after the company

said it has become the subject of a federal grand jury probe focusing on the company's dealings with

Columbia/HCA Healthcare

(COL)

, which has been charged with health-care fraud. Columbia lost 3/4 to 31 11/16.

Pfizer

(PFE) - Get Report

lowered 4 13/16 to 113 7/16 even after prescriptions for its blockbuster drug

Viagra

tripled in its second week of sales to 113,134.

Times Mirror

(TMC)

fell 11/16 to 58 1/8 after announcing that it is selling

Matthew Bender & Co.

to U.K.-based

Reed Elsevier

for $1.65 billion.

Chrysler

(C) - Get Report

dived 1 11/16 to 40 after announcing on Friday that it will give coupons worth $500 to $1,000 to owners of

Dodge

, Chrysler,

Plymouth

,

Jeep

and

Eagle

vehicles to be used toward the purchase of a new 1997, 1998, or 1999 model vehicle.

Boeing

(BA) - Get Report

sank 7/16 to 50 1/4 after it was reported that

Singapore Airlines

may buy 10 A340-500 jetliners from Boeing competitor

Airbus Industrie

.

ADE

(ADEX)

was flat at 17 after saying it would cut staff by 12% in an attempt to contain costs during a period of lower demand for its products.