(Updated from 10:34 a.m.)

Blue chips were building on yesterday's modest gains, while tech stocks were singing the blues -- again. With little sense of overall tone or direction to guide the overall market, stocks were surging or tumbling on specific company news.

J.P. Morgan

(JPM) - Get Report

, for instance, was rocketing higher and giving power to the

Dow Jones Industrial Average. The company's shares were up 5% after a German weekly reported that German bank

Deutsche Bank

was in talks to buy the U.S. investment bank. Deutsche Bank declined to comment on the report. The Dow was lately up 101 to 11,361.

After a steady stream of gains in August as interest-rate relief spread, Wall Street has begun worrying about earnings again. In the semiconductor sector, there has been some debate lately over whether semiconductor companies have seen the end of a favorable-demand cycle. Whether or not last August's gains can last depends partly on how well the market holds up this week. Some market observers say the market just needed a bit of consolidation.

Meanwhile

Micron Technology

(MU) - Get Report

was getting slammed, down 10.4% to $70.38 after

Donaldson Lufkin & Jenrette

downgraded the stock to underperform from buy.

And, still smarting from a

Piper Jaffray

downgrade on chip bellwether

Intel

(INTC) - Get Report

yesterday, the

Philadelphia Stock Exchange Semiconductor Index

was taking it on the chin for the second day in a row. The SOX was lately down 4.3%, on top of yesterday's 1.8% dip.

The

Nasdaq Composite Index was lately hurting, down 66.2 to 4077.

With a dearth of economic data available, investors were cheered by revised second-quarter productivity numbers that showed the efficiency of U.S. workers rose more strongly than previously estimated. That, in turn, raises output and helps keep a lid on inflation. Old Economy stocks were higher; the

Morgan Stanley Cyclical Index

was up 1.2% and the

Dow Jones Utility Average

was up 1.1%.

Financials are strong, though that strength can be attributed more to ongoing consolidation -- or rumors of it -- than to economic data.

"The consolidation theme is being continually replayed," said Bill Schneider, head of U.S. equity block trading at

UBS Warburg

. He was referring to

Citigroup's

(C) - Get Report

$31.1 billion acquisition of

Associates First Capital

(AFS)

, which was announced this morning.

TheStreet.com/NYTimes.com

joint newsroom wrote about the deal in a

separate story .

TST Recommends

Aside from that, Schneider said, "There is no real theme, except that big-cap tech is a little tired, and some of that money is winding its way into small-cap techs."

Back in individual stock action,

WorldCom

(WCOM)

got busted by

Lehman Brothers

and

Wachovia Securities

. The stock was lately down 7%.

Sector Watch

Oil-service stocks were also giving a boost to the Dow after crude oil prices hit a new 10-year high. Crude traders were betting that any production increase on which OPEC might agree at this weekend's meeting won't be enough to restore paltry inventories. Despite the continuing rise in oil prices, an analyst downgraded these stocks in mid-August, saying they had become overvalued.

Texaco

(TX) - Get Report

,

Chevron

(CHV)

and

Schlumberger

(SLB) - Get Report

were leading the sector.

The Philadelphia Stock Oil Service Index

was up 3.3%

Computer-hardware makers failed to get a boost despite an upgrade on

IBM

(IBM) - Get Report

and other box-makers from

Bear Stearns

. Bear analyst Andy Neff said Tuesday night that he had raised his earnings estimates on IBM for the next two years.

He also said personal-computer demand was on track for

Apple Computer

(AAPL) - Get Report

,

Dell Computer

(DELL) - Get Report

,

Compaq

(CPQ)

and

Gateway

(GTW)

. His comments countered concerns raised by competing brokerages recently. The

Philadelphia Stock Exchange Computer Box Maker Index

was down 2.7%.

Bonds/Economy

Treasuries -- on little news and light volume -- yesterday surrendered a small portion of the gains that had dropped most yields to their lowest levels of the year. The benchmark 10-year Treasury note fell Tuesday 4/32 to 108 8/32, lifting its yield nearly a basis point to 6.672%. The 10-year note was lately down 6/32 to 100 8/32, yielding 5.716%.

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