(Updated from 10:48 a.m. EST)

A bit of sweet Valentine's loving that was pulsing through tech stocks early this morning faded after investors caught wind of some bad news for a few stocks. The Dow, however, was charging higher; for a time, it was logging triple-digit gains, though it was lately off session highs.

The

Nasdaq was lately hopping around the flatline and semiconductor stocks, often seen as key tech leaders, were up. The

Philadelphia Stock Exchange Semiconductor Index

was 3.6% higher. Oh, and biotech was getting a lift, perhaps on news that

Celera Genomics

(CRA)

seems to have a stronger gene map project than its public group competitor

Human Genome Project

. The official findings won't be published until later this week. The

Nasdaq Biotechnology Index

was up 2.2% and Celera was rising 11.8% to $44.75.

Breadth had lately improved on the New York Stock Exchange, but on the Nasdaq, advancers and decliners were about even, with the latter just marginally outnumbering the former. For the most part, investors were sitting this session out and volume was about as meaty as

Calista Flockhart.

The broader market

S&P 500 had lately turned up, while the blue-chip industrial

Dow was muscling ever higher.

Networking giant

Cisco

(CSCO) - Get Report

was finally stemming a recent slide. The stock was just barely higher, up by 2.4% after a three-day selloff sparked by a

warning about softer sales growth last Tuesday after the market closed. The kid remained a favorite trade among tech investors, and, for the fourth day in a row, it was one of the most actively traded stocks on the Nasdaq.

Now for the bad news.

Emulex

(EMLX)

was spinning lower, down 48.3% after warning in a Webcast this morning that it would miss estimates for its fiscal third-quarter, which ends in March. The data storage company blamed order delays from customers and said if the trend continues, earnings for the quarter could be hurt. Some have speculated that the data storage companies are the most

immune of tech companies in an economic slowdown.

And the contract manufacturing sector wasn't faring too well after

Lehman Brothers

downgraded

Jabil Circuits

(JBL) - Get Report

,

Plexus

(PLXS) - Get Report

and

SCI Systems

(SCI) - Get Report

to buy from strong buy and

DDi

(DDIC)

to market perform from strong buy. Jabil was off 4.3%, Plexus was falling 7.1%, SCI Systems was down 1.9%, and DDi was falling 3.1%.

Lehman also extended its per share loss estimate for

Lucent

(LU)

to 67 cents from 50 cents in 2001, pushing the blistered and beaten stock down a further 1.3%.

Analysts were also negative on applications software maker

Broadvision

(BVSN) - Get Report

and long-suffering Internet consulting firm

Razorfish

(RAZF)

.

The Dow was moving higher on strength in retailer

Wal-Mart

(WMT) - Get Report

and pharmaceutical

Johnson & Johnson

(JNJ) - Get Report

, which together were giving the index a 30 point lift. After being one of the weakest components early on,

IBM

(IBM) - Get Report

had lately turned around, and was the third-best performer on the index, adding 11 points of upside.

In the past two weeks, markets have generally been plodding lower on low volume. In fact, the market closed last week pretty down and out, having erased most of its January gains. Up near 14% at the end of January, the Nasdaq was up just 2% as of Friday. The Dow was flat for the year as of Friday's close, though so far today it is making another good stab toward 11,000.

Still, recent economic data and earnings reports suggest the tunnel may be longer and the light further off than Wall Street thought. Some companies have recently expressed doubt that things will pick up in the third quarter -- Cisco being just one of many.

Go Al, Go!

Investors are probably playing it safe ahead of

Federal Reserve Chairman

Alan Greenspan's

Humphrey-Hawkins testimony before Congress tomorrow. That's his twice-yearly chat with elected officials about the state of the American economy, and Wall Street may be hoping for something encouraging.

But most economists don't expect anything new. Greenspan will probably reiterate that the economy is slowing and that he's willing to do whatever it takes to keep growth around 4%.

After the Fed cut interest rates twice in January -- two half-point cuts left the lending target at 5% -- investors are hoping for more aggressive action so the economy can get back on its feet. Aggressive means at least a half-point cut at the Fed's next meeting on March 20, and some even hope for an intermeeting cut before then.

Back to top

Sector Watch

Financials were mixed today, with investors favoring bank stocks over brokerages. The

Philadelphia Stock Exchange/KBW Bank Index

was lately up 1%, while the

American Stock Exchange Securities Broker/Dealer Index

was off just 0.2%.

Telecommunications stocks were coming back a bit from a two-week slide. The

Nasdaq Telecommunications Index

was 0.5% higher.

Nokia

(NOK) - Get Report

was up 3.6% after losing 8% Friday when

UBS Warburg

pulled it from its recommended list in Europe.

Ericsson

(ERICY)

was 3.2% higher, and

Motorola

(MOT)

was up 3.4%.

Some defensive names were doing well despite the turn in the market -- drugs were up, with the

Amex Pharmaceutical Index

was 0.6% higher. The

S&P Tobacco Index

was also higher, up by 0.9% to 351.77, a 52-week high.

Philip Morris

(MO) - Get Report

, which has been hitting new 52-week highs since November of last year, was lately off 0.2% to $47.93.

Back to top

Bonds/Economy

Treasury prices are mixed, with the long bond and the 10-year note dipping, but the shorter notes unchanged or slightly positive With no economic news due today, the money market is likely to respond mostly to equity movements. Traders are also awaiting

Federal Reserve chairman

Alan Greenspan's address before the

Senate Banking Committee

tomorrow. They hope that the central bank chief will reiterate the need for more interest rate cuts to boost the economy.

The benchmark 10-year

Treasury note lately was down 2/32 at 99 23/32, increasing its yield to 5.038%.

Cathy Minehan, President of the

Boston Federal Reserve Bank

and a voting member of the Fed's monetary policy committee, said today that the Fed's 100 basis-point lowering of interest rates in January is already producing encouraging results. She predicted that

gross domestic product

(

definition |

chart |

source

) growth this year should be around 2%. Echoing recent statements by Greenspan, Minehan asserted that inflation was "well behaved." This was good news to Fed watchers, since figures released last week showed unit labor costs on the rise, usually perceived as inflationary.

Back to top