There was selling in tech. All right, there wasn't much selling, but it's something.

Investors seemed concerned about the numbers they're going to see

this week from such heavyweights as computer maker

Apple

(AAPL) - Get Report

,

Microsoft

(MSFT) - Get Report

,

Sun Microsystems

(SUNW) - Get Report

and

Altera

(ALTR) - Get Report

.

Also putting pressure on the sector was a weighty blow from

Lehman Brothers

, which downgraded several semiconductor stocks, saying "we are adjusting our ratings to differentiate those stocks which we think should be aggressively pursued as they move higher." The

Philadelphia Stock Exchange Semiconductor Index

, which tracks the chip sector, was down 5.1%. Industry leader

Intel

(INTC) - Get Report

was down 2.3% ahead of its earnings report, which comes out after the close. Investors will be listening closely to see what guidance Intel -- and other companies, as they report earnings, gives about future earnings.

While the tech-soaked

Nasdaq Composite Index was a touch lower, the blue-chip

Dow Jones Industrial Average surged higher.

In the land of telecom,

Deutsche Banc Alex. Brown

said increasing concern about the telecommunications equipment environment in 2001 caused it to cut ratings on

ADC Telecommunications

(ADCT) - Get Report

and

Advanced Fibre Communications

(AFCI)

. Both stocks ended lower.

So many tech stocks have been hurt as companies have cut back their capital expenditures in the face of an economic slowdown. But all was not lost in techland.

Xircom

(XIRC)

was bouncing 36.5% on news that it would be bought by Intel for $748 million. Xircom makes mobile computing gear. And radio broadcaster

Citadel Communications

(CITC)

was jumping after private investment firm,

Forstmann Little

, said it would buy the company for $2 billion. The stock was up 41.4%.

And then it was raining cats and dogs for

Ralston-Purina

(RAL)

, which got showered with gains of 28% on news the St. Louis-based pet food maker agreed to be acquired by Swiss food giant

Nestle

. The deal is worth about $10.3 billion.

As is happening often these days, stocks that were beaten-down last week are getting some healing hands today.

3M

(MMM) - Get Report

,

Merck

(MRK) - Get Report

,

Procter & Gamble

(PG) - Get Report

and

General Motors

(GM) - Get Report

were each adding more than 10 points to the Dow's gains.

Sector Watch

TheStreet.com Internet Sector

index, aka

the DOT, continued its rally from Friday. The beaten up Internet company index was up 2.1%, with help coming from

eBay

(EBAY) - Get Report

,

Yahoo!

(YHOO)

and

BroadVision

(BVSN) - Get Report

.

The

Dow Jones Utility Average

was down 1.8%.

Edison International's

(EIX) - Get Report

Southern California Edison unit temporarily suspended payments to creditors in an effort to conserve cash and force the hand of regulators to bail them out in the ongoing California energy crisis.

Bank stocks were higher.

Citigroup

(C) - Get Report

and the

Bank of New York

(BK) - Get Report

this morning announced earnings that met analysts expectations.

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Bonds/Economy

Treasuries moved a bit higher, reversing their price drop of the last five trading days.

Much of their recent drop in value was due to heavy buying of federal agency and corporate issues. The news last Friday of stronger-than-expected retail sales and lingering threats of inflation also reduced anticipation of a major corrective move by the

Federal Reserve-- and kept traders away from government securities. Now their focus is back on Treasuries, and many are in the market to snap up bargains.

Still, analysts are projecting that the

Consumer Price Index, to be released tomorrow morning, will show that inflation has been checked. And they say the softening business inventory data is reviving hopes of the Fed will make another substantial rate cut when it meets at the end of the month.

Business inventories

(

definition |

chart |

source

) for November rose 0.5% after an increase of 0.7% in October. Economists polled by

Reuters

had forecasted a rise of 0.4%. The number has now risen continuously for almost two years, and reflects the steady weakening in business spending.

The benchmark 10-year

Treasury note lately was up 2/32 to 103 27/32, lowering its yield to 5.234%.

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