Market Update: Big Hitters J.P. Morgan, DuPont Keeping Dow Down - TheStreet

Market Update: Big Hitters J.P. Morgan, DuPont Keeping Dow Down

<LI>J.P. Morgan down after reaching all-time high yesterday.</LI><LI>DuPont falling after earnings warning.</LI><LI>UAL estimates downgraded to 30 cents from $2.</LI>
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(Updated from 1:09 p.m.)

Technology stocks were still in the green in afternoon trading, while blue chips were off their lows and fighting to come out of the red.

The tech-laden

Nasdaq Composite Index was keeping a close watch on its gains, lately up 65 to 4078, and investors were happy about it after a two-day sell-off took a bite out of August's more than 10% rally. Investors saw the chance to take advantage of price dips and stepped in to buy.

Lately, the

Dow Jones Industrial Average

was down 18.6 to 11,292, with weakness from financial component

J.P. Morgan

(JPM) - Get Report

. The investment bank was losing 3.1% after topping off a new all-time high yesterday on reports that it was talking with Deutsche Bank about a possible combination.

Semiconductor stocks were among the beaten-down sectors getting interest from bargain hunters.

Latitice Semiconductor

(LSCC) - Get Report

was up 4%, along with

Vitesse Semiconductor

(VTSS)

, which was 7.6% higher.

The

Philadelphia Stock Exchange Semiconductor Index

was up 3.1%.

Elsewhere, the broad S&P 500 was up 8.7 to 1501, while the small-cap

Russell 2000

was edging up 2.2 to 538.6.

In company news,

DuPont

(DD) - Get Report

was falling $5.63 to $42.38 after the chemical giant warned investors that it had scaled back its fiscal 2000 EPS estimates to between $2.85 and $2.95 a share, falling below the 16-analyst estimate of a $3.01 profit. DuPont blamed higher energy and raw material costs for the downward revision.

The skies weren't looking friendly for

UAL's

(UAL) - Get Report

United Airlines

. After reporting a 1.9 point drop in its August load factor, United's parent faced an estimates downgrade from both

Merrill Lynch

and

Donaldson Lufkin & Jenrette

.

Merrill Lynch chopped UAL's third-quarter EPS estimate to 30 cents from $2 and its full year EPS view to $5.80 from $8.25, while

Donaldson Lufkin & Jenrette

cut UAL's 2000 estimate to $6.85 from $7.90 and 2001 EPS estimates to $8.50 from $8.75. The shares were off 0.8%.

The Internet sector was taking a hit after Merrill analyst

Henry Blodget made cautious comments about third-quarter earnings.

TheStreet.com Internet Sector

index was down 13.1 to 833.

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Sector Watch

Drug stocks rose today after being knocked for a loop with yesterday's downgrade on the sector by analyst Leonard Yaffe of

Banc of America Securities

. Yaffe cut his recommended weighting to market weight from over weight, saying he believes growth of the U.S. drug industry could slow significantly and that a shift to generic drugs would hurt the sectors' biggest companies.

The American Stock Exchange Pharmaceutical Index

was rebounding 1.9%, with heavy-hitters

Merck

(MRK) - Get Report

,

Eli Lilly

(LLY) - Get Report

and

Pfizer

(PFE) - Get Report

riding higher 1.8%, 3.1% and 1.4%, respectively.

Oil service stocks were sinking after OPEC said it plans to raise output by 700,000 barrels a day at its Sunday meeting in Vienna. Crude oil prices edged off a little from a 10-year high. The

Philadelphia Stock Exchange Oil Service Index

was losing 1.7% after yesterday's high-flying gains. With crude oil futures striking $34 a barrel yesterday, the group received a cash infusion as investors became confident that oil companies would ramp up their capital spending.

Lately, the

American Stock Exchange Oil &Gas Index

was down a fractional 0.1%.

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Bonds/Economy

Treasuries are lower on little news, as the economic data drought continues.

The benchmark 10-year note was lately down 5/32 to 99 31/32, dropping its yield to 5.756%.

With no major economic reports slated before next Thursday (

retail sales and the

Producer Price Index) and Friday (the

Consumer Price Index and

industrial production, the Treasury market is biding its time, looking to energy prices and the corporate-bond offering calendar for guidance.

Oil yesterday hit a 10-year high, and the corporate-bond offering calendar is projected to be heavy for the month, competing with Treasuries for investor dollars.