Market Update: J.P. Morgan Weighing Down Dow in Morning Trading

Blue-chips began to pare their opening losses, but pressure from its tech components and

J.P. Morgan

(JPM) - Get Report

was keeping the Dow red. Meanwhile, tech stocks overcame early-going earnings fears, crossing the line into positive territory.

Lately, the

Dow Jones Industrial Average was sliding 35 to 11,199, with its tech components

Hewlett-Packard

(HWP)

and

Intel

(INTC) - Get Report

losing ground.

For its part, Intel's morning woes can be blamed on a downgrade this morning by

Banc of America

to market perform from strong buy, according to a several traders.

The

Nasdaq was ahead 2 to 3851. In tech trading, Web giant

Inktomi

(INKT)

said it has agreed to acquire

Fastforward Networks

, which makes technology for distributing online broadcasts, in a stock deal valued at $1.3 billion. According to the terms, Inktomi would exchange 11.9 million shares for all outstanding shares options and warrants of the closely held firm. Fastforward will take on the Inktomi label, as it Media unit and will be lead by its current Fastforward president and CEO Abhay Parekh.

TheStreet.com Internet Index

was climbing 0.8%.

J.P. Morgan was falling 4.2%, on news that it would be acquired by

Chase Manhattan

(CMB)

in a $33.2 billion stock deal. J.P. Morgan ran up sharply in the last two weeks on speculation that it would be the next bank to consolidate its services with another industry player. Chase was off 4.9%.

SCI

(SCI) - Get Report

was skidding 22.2% after it cautioned investors that its expects first-quarter earnings to fall below the 17-analyst estimate of 38 cents a share due to seasonal slowdown in consumer electronics and finished PC demand. The electronics components maker sees first-quarter earnings at 34 cents a share and fiscal 2001 earnings between $1.70 a share to $1.74 a share, also below the 18-analyst estimate of $1.96. SCI forecasts second-quarter EPS at 42 cents, a penny below the current estimate.

Sector Watch

The

Philadelphia Stock Exchange Semiconductor Index

up fractionally, thanks to

Rambus

(RMBS) - Get Report

, which is soaring 8.3%. The chip maker was countering weakness from

Micron

(MU) - Get Report

and

Intel

(INTC) - Get Report

, on news that it entered anew chip licensing pact with Japanese-based

NEC Corp

.

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Bonds/Economy

Bond prices are higher, but not as high as they were earlier in the session. As oil and stocks have moved off their lows, Treasuries have given back some of their gains. Treasury traders are also paying close attention to the corporate bond market, where more than usual new issues are competing for investor dollars.

Meanwhile, while there is no major economic news today,

fed funds futures are discounting lower odds than ever that the

Fed will hike interest rates again this year. The December fed funds contract is putting the odds of a hike in the rate to 6.75% from 6.5% currently at just 5%, down from 21% yesterday.

The benchmark 10-year Treasury note, up as much as 9/32 earlier, lately was up just 7/32 at 100, dropping its yield to 5.749%.

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