Market Update: Major Indices in the Red - TheStreet

The market was still somewhat mixed headed into midday, as investors were sifting through the wreckage of earnings pre-announcement season and portfolio managers were window dressing their books to impress investors at the quarter's end. But all indices were lately in the red.

A third-quarter earnings warning from imaging company and

Dow Jones Industrial Average component

Eastman Kodak

(EK)

this morning sideswiped the Dow. Kodak was lately off 20.9%, knocking more than 72 points off the index.

Microsoft

(MSFT) - Get Report

was helping to cushion losses on the blue-chip index, however, lately up 3.7% and adding 13.7 points to the Dow's upside.

The Supreme Court this morning sent its antitrust case back to the appeals court, which was much friendlier about the case. The government's case against Microsoft proposed splitting up the company.

Other big movers on the NYSE included printing firm

Lexmark International

(LXK)

, which also warned of a third-quarter profit shortfalls after the close yesterday. Lexmark was lately off 26% to $38.38.

Lucent

(LU)

was the NYSE's most actively traded stock, but its price wasn't moving very far -- it was lately down 13 cents to $30.75. Yesterday, Lucent got clobbered by rumors of an earnings miss and CEO resignation.

Microsoft initially was charging up the

Nasdaq Composite Index. But the tech-heavy index was lately languishing near the flatline, partly under pressure from biotech stocks such as

Millennium Pharmaceuticals

(MLNM)

,

Alexion Pharmaceuticals

(ALXN) - Get Report

and

Gilead Sciences

(GILD) - Get Report

, off 4.8%, 7.9% and 12.3%.

Salomon Smith Barney

started coverage of several companies in the sector this morning, mostly with outperform or neutral ratings. The

Nasdaq Biotechnology Index

was lately off 2.2%.

Other Nasdaq movers were fiber-optic communications maker

JDS Uniphase

(JDSU)

, which received a bullish call from

Lehman Brothers

. JDSU was lately up 0.8%.

But who knows where the market will finish the day? Yesterday's session started out strong, with both tech stocks and industrials charging higher in early action, but the Lucent rumors, as well as a buzz that

Cisco

(CSCO) - Get Report

had lost a major customer, walloped those companies' shares and put pressure on several other tech bellwethers. After adding 60 points of padding in early trading, the

Nasdaq Composite Index flipped into the red and ended the day over 60 points lower.

Today, so far, tech bellwethers were mixed. Cisco and

Sun Microsystems

(SUNW) - Get Report

were lately up fractionally, by 0.4% and 0.9%, respectively.

But

IBM

(IBM) - Get Report

and 1%,

Dell

(DELL) - Get Report

were down, off 1.9% and 0.2% respectively.

Cisco and Dell were big losers Monday.

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Bonds/Economy

The Treasury market was narrowly mixed amid stable oil prices and a stronger-than-expected September

Consumer Confidence Index.

Oil was lately well off the 10-year highs it hit last week, thanks to the Clinton administration's decision to release some oil from the country's emergency stockpiles, and that's a positive for the bond market. Rising oil prices make bond buyers stingy to the extent that they threaten to lift the inflation rate.

Meanwhile, consumer confidence remains high in spite of the rise in energy prices, indicating that the adverse impact on growth may be muted. The Consumer Confidence Index rose to 141.9 in September from 140.8 in August. Economists polled by

Reuters

had forecast a smaller rise, to 141.4, on average.

"The reaction of consumers remains a key factor that will determine how recent energy price increases will effect the economy,"

Barclays Capital

economist Henry Willmore wrote recently. "So far, it appears that consumers are remaining confident. This will delay and possibly mute the impact of higher oil prices on growth."

The benchmark 10-year

Treasury note lately was up 2/32 at 99 12/32, making its yield 5.835%.

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Sector Watch

Transport, drug and retail stocks, as well as brokerages and banks, were weaker today.

And semiconductors were flying on strength in

Micron Technologies

(MU) - Get Report

. Micron was lately up 7.1%.

Intel

(INTC) - Get Report

somehow wasn't getting any lift from news that the Federal Trade Commission had dropped its antitrust case against the company. Intel has been underwater since last week, when it warned of an earnings miss. Intel was lately down 2.9%.

The

Philadelphia Stock Exchange Semiconductor Index

was lately 0.4% higher.

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