Market Traces a Rocky Course but Broadens Out

The Russell 2000 is continuing its recent rally and leads the market, but all of the major measures are off their highs.
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Investors' leper-like relationship with small-caps continued to turn around today as the long-laggard

Russell 2000

paced the market's major averages so far for the second day in a row.

But the well-known small-cap gauge is well off its session highs, as are all of the market's major averages, which came under a steady stream of selling pressure beginning around 11 a.m. EDT.

The Russell was turning in a decent performance despite the overall downswing in the market, and was up 3, or 0.7%, to 415.

The

Dow Jones Industrial Average

, meanwhile, was down 18 to 10,321.

Caterpillar

(CAT) - Get Report

was the best performer in the Dow, up 2 1/16 to 53 7/16.

The

Nasdaq Composite Index

slumped 18, or 0.7%, to 2580, after gaining earlier in the session. Tech stocks overall sat out

yesterday's rally, due in part to the postclose Friday earnings warning from

Compaq

(CPQ)

.

As for tech-sector barometers, the

Philadelphia Stock Exchange Semiconductor Index

was down 2%, while the

Nasdaq 100

was off 1.6%. Meanwhile, the

Morgan Stanley High-Tech 35

was down 1.3%.

Meanwhile, the market in general and the tech sector in particular are anxiously awaiting the earnings report from

Intel

(INTC) - Get Report

. Ahead of its earnings report, slated for after the close, Intel slumped 1/2 to 60 11/16. The chip giant was the most active issue on the

Nasdaq Stock Market

, with 20.1 million shares changing hands.

TheStreet.com

wrote about Intel in a story

this morning.

As for Compaq, it was most active on the

New York Stock Exchange

, with 32.6 million shares changing hands. It was unchanged at 24 1/16.

The big-cap

S&P 500

slipped 14, or 1%, to 1345.

Overall, there are more reasons to be positive than negative on the market, said John Roque, senior analyst at

Arnhold & S. Bleichroeder

.

"I wouldn't say everything's bullish entirely," but there's more money to be made on the long side, said Roque.

"Anyone who's trying to pick a top is being foolish," said Dick Stein, chief technical analyst at

Noble Financial Group

, speaking when the market was firmly on the plus side. Stein, marveling at the market's performance earlier in the day, said he had thought news that Serb forces crossed into Albania might unsettle the market. It didn't. (And the Serbs have since returned to their side of the border.)

"Nothing seems to bother it," he said of the market.

TheStreet.com Internet Sector

index was down 13, or 1.6%, to 777. Conversely,

TheStreet.com E-Commerce Index

was soaring 6, or 4.3%, to 141 but was off its best levels of the session.

Brokerage stocks were still flying. The

American Stock Exchange Broker/Dealer Index

was up 5.5%, thanks to its online trading components and on the heels of strong earnings from

Merrill Lynch

(MER)

and

PaineWebber

(PWJ)

, whose numbers mocked Street estimates.

E*Trade

(EGRP)

jumped 12.2%, while

Charles Schwab

(SCH)

leapt 7.6%.

Roque noted that some long-forgotten sectors of the market have been embraced by the recent rally, including steel, chemical and forest and paper product stocks.

Today, forest and product stocks were higher, as the

Philadelphia Stock Exchange Forest & Paper Products Index

rose 2%.

As for the Treasury market, the 30-year Treasury bond was lately down 25/32 to 96 9/32, yielding 5.51%. (For more on the fixed-income market, see today's early

Bond Focus.)

Two key economic reports were released this morning.

Retail sales

rose 0.2% in March, while retail sales excluding autos jumped 0.5%. The

Consumer Price Index

rose 0.2% overall and 0.1% excluding food and energy prices.

Market internals, despite the downturn in the market, were positive.

On the

New York Stock Exchange

, winners were beating losers 1,522 to 1,361 on 489 million shares. On the Nasdaq, advancers were leading decliners 1,960 to 1,775 on 796 million shares.

On the NYSE, 95 issues had set new 52-week highs while 39 had touched new lows. On the Nasdaq, 163 issues had set new highs while new lows totaled 67.

Among other indices, the

Dow Jones Utility Average

was down 0.4%, the

American Stock Exchange Composite Index

was down 0.1% and the

Dow Jones Transportation Average

was down 0.9%.

Tuesday's Midday Movers

By Heather Moore
Staff Reporter

GeoTel Communications

(GEOC)

was flying up 11 3/4, or 26.8%, to 55 5/8 on news

Cisco

(CSCO) - Get Report

will buy it for $2 billion. Under terms of the deal, Cisco will exchange 0.51 of a share for each share and option of GeoTel. Cisco was down 3 9/16 to 114.

In other news:

Coca-Cola

(KO) - Get Report

was up 1 3/16 to 63 1/16, down from an earlier 64 3/4, after

Merrill Lynch

upgraded it to near-term accumulate from neutral.

Informix

(IFMX)

, which makes software for e-commerce sites, was up 1 15/16, or 27.9%, to 8 13/16 after teaming up with

CyberCash

(CYCH)

, which makes e-commerce payment technology, to offer customers a secure way to process online business transactions. CyberCash was up 3 7/16, or 22.7%, to 18 9/16.

Metromedia Fiber Network

(MFNX)

was up 6 3/4, or 9.9%, to 75 after setting a 2-for-1 stock split.

MIH

(MIHL)

was up 1 5/8, or 9%, to 19 11/6 after last night Merrill Lynch priced its 9.1-million-share IPO top range. MIH is a multinational provider of pay-TV services and technology based in the British Virgin Islands.

Net.B@nk

(NTBK)

was up 29 1/2, or 18.6%, to 188 7/8 after setting a 3-for-1 stock split.

RealNetworks

(RNWK) - Get Report

was down 8 3/4 to 238, down from an earlier 263 3/4, after news that it's buying privately held

Xing Technology

, a developer and provider of MP3 software, for up to $75 million in stock. RealNetworks expects to record a charge for acquisition-related costs after closing the deal, to be completed in the third quarter.

Charles Schwab was up 10 3/16, or 7.6%, to 145 3/16 after

CIBC Oppenheimer

upgraded it to strong buy from hold and set a price target of 200 a share. E*Trade was up 11 11/16, or 12.2%, to 107 3/4 and

Ameritrade

(AMTD) - Get Report

was up 17, or 12%, to 159.

Earnings/revenue movers

Harley Davidson

(HDI)

was up 2 7/8 to 61 3/16 after last night reporting first-quarter earnings of 38 cents a share, 2 cents above the 14-analyst outlook and higher than the year-ago 29 cents.

Hewlett-Packard

(HWP)

was up 1 1/4 to 69 5/8 after Chief Executive Lewis Platt said the company is on track to record double-digit sales growth in 1999, with the second half of the year providing most of the strength. Platt sees a rebound in recently sluggish sales due, in part, to an expected recovery in Asia.

Rare Hospitality

(RARE) - Get Report

was up 3 15/16, or 29%, to 18 after last night saying it sees first-quarter earnings of 33 cents to 34 cents a share, excluding items. The six-analyst outlook called for 29 cents vs. the year-ago 22 cents. The company said its

LongHorn Steakhouse

unit provided most of the growth, with a 5.2% increase in same-store sales for the quarter.

Rent-A-Center

(RCII) - Get Report

was up 3 1/4, or 12.9%, to 28 11/16 after last night saying it expects first-quarter earnings coming 20% higher than the eight-analyst forecast for 28 cents a share, reflecting its acquisition of

Thorn Americas

. The company earned 31 cents in the year-ago period.

Versant

(VSNT)

was up 9/16, or 33.3%, to 2 1/4 after last night saying it sees a first-quarter loss of 14 cents to 17 cents a share, including restructuring charges. The three-analyst view calls for an operating loss of 20 cents. The company lost 65 cents in the year-ago period.

In other earnings news: