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Market Update: Oracle Boosting Nasdaq; Consumer Goods Sinking Dow in Morning Action

Software database heavyweight Oracle (ORCL) - Get Report was leading the Nasdaq Composite Index higher on a wave of optimism , boosted by an upgrade, ahead of its first-quarter earnings report, due out after the market close.

The tech-laden Comp was lately rising 89, while

TheStreet.com Internet Sector

was up 3983, trying to follow suit.

This morning,

Morgan Stanley Dean Witter

analyst Chuck Phillips took the bold move of upgrading Oracle to strong buy from outperform, just as the company is getting set to roll out its much-awaited fiscal first-quarter earnings report. While analyst expect Oracle to report earnings of 13 cents a share, the whisper number floats at 14 cents, according to

WhisperNumber.com

, a Web site that tracks investors' expectations. Oracle was up 3 to $84.81.

Meanwhile, blue-chips were unable to squeeze any juice out of the latest round of tame economic data which showed the pace of economic growth continues to run at more moderate levels. The

Dow Jones Industrial Average was dipping 36 to 11,145. Gains in the Dow's tech components were being offset by broad weakness in a number of financial and industrial stocks.

The

Producer Price Index

,

retail sales

and initial jobless claims numbers and a slight recovery in the euro have been unable to inspire any confidence in the Old Economy guys.

Elsewhere the

S&P 500 and the small-cap

Russell 2000 were both sporting green. The SPX was up 7 to 1491, while the Russell was up 5 to 539.

Other favorites with tech investors today included

Conexant

(CNXT) - Get Report

, which announced last night that it plans to spin off its Internet business. The company was lately up 34.7% to $50.06. Conexant and Oracle were two of the most actively traded stocks on the Nasdaq this morning.

Meanwhile,

Chase Manhattan Bank

(CMB)

was just barely recovering from a week long plummet this morning after some analysts made positive comments on the stock. Chase has fallen precipitously this week as merger rumors gathered in the sector and following confirmation of its plans to acquire U.S. brokerage powerhouse

J.P. Morgan

(JPM) - Get Report

yesterday. Chase was one of the most active stocks on the New York Stock Exchange.

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Sector Watch

Box-makers were rebounding this morning, and the

Philadelphia Stock Exchange Computer Box Maker Index

was up 1.5% after losing 0.9% yesterday. Box-makers were under pressure yesterday after

SCI Systems

(SCIS)

cut its fiscal first-quarter profit forecast, citing weakness in consumer electronics and dead PC-demand.

PC-makers

Hewlett-Packard

(HWP)

,

Compaq

(CPQ)

and

Dell

(DELL) - Get Report

were all rebounding.

Semiconductors were soaring, with the

Philadelphia Stock Exchange Semiconductor Index

up 2.6%.

Financials were still rising after a few days of frenzied activity. Banks were leaning to the upside with the

Philadelphia Stock Exchange KBW/Bank Index

up 0.5% while the

American Stock Exchange Broker/Dealer Index

was bouncing up 1%.

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Bonds/Economy

Today's economic reports were uniformly tame. August retail sales were more or less in line with expectations, while the August PPI rose less than expected.

Retail sales rose 0.2% compared to an average forecast of a 0.3% gain. Excluding autos, sales rose 0.3%, in line with expectations. However, July's results were revised upward, making the August results appear somewhat weaker than they actually are.

Meanwhile, the PPI fell 0.2% vs. an average forecast that it would rise by that amount. The core PPI, which excludes food and energy prices, rose 0.1%, a tenth less than expected. The August PPI does not capture the more recent rise in oil prices, which is expected to show up in the September report. Energy prices fell 0.2% in the August PPI, while food prices fell 0.7%, their largest drop in at least a year.

Also today, initial jobless claims rose to 324,000, their highest level since January 1999, from 311,000 the previous week, indicating continued slackening in the labor market and possibly a slowing rate of job growth.

The 10-year Treasury note was lately unchanged at 100 7/32, and yielding 5.72%.

Bond prices rallied nicely yesterday, thanks to another decline in oil prices and growing optimism about the monetary policy outlook.

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