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Market Update: Same, Same; Dow Up, Comp Down Double Digits

<LI>Bank stocks higher after good news from Citigroup, Bank of New York.</LI><LI>Blue-chip tech stocks keep Dow at bay.</LI><LI>Cisco most active after CEO makes positive comments.</LI>

(Updated from 11:10 a.m.)

Stocks swayed lower at the open on fears that companies reporting today after the market close -- and later this week -- would issue disappointing outlooks for future earnings.

Several banks reported decent earnings this morning. Companies scheduled to report after the close include tech heavyweights chipmakers


(INTC) - Get Intel Corporation (INTC) Report


Applied Micro Circuits


as well as networking firm

Juniper Networks

(JNPR) - Get Juniper Networks, Inc. (JNPR) Report


But stocks were lately making an attempt at a comeback, with the

Dow tickling in the green and the

Nasdaq dabbling in the red. Some strong performances last week by the major indices gave a much-needed boost to investor sentiment.

Bank stocks were higher after the country's largest financial-services company,


(C) - Get Citigroup Inc. Report


Bank of New York

(BK) - Get Bank of New York Mellon Corporation Report

reported earnings that were in line with estimates.

Bank of America

(BAC) - Get Bank of America Corp Report

missed lowered earnings expectations by a penny, but it, too, was on the up bandwagon.

Citigroup was lately up 1.5% to $53.94. Rising more steadily, Bank of New York was up 3.1% to $51.94, and Bank of America was 3.8% higher to $50.38. The

Philadelphia Stock Exchange/KBW Bank Index

was up 2.3% to 930.7.

An industrywide slowdown in some investment banking and securities brokerage areas, along with concerns about weakening credit quality -- which hurts banks' loan portfolios -- has investors worried that banks will have

bad news this earnings season.

Citigroup was adding almost 5 points of upside to the Dow, while

J.P. Morgan

(JPM) - Get JPMorgan Chase & Co. (JPM) Report

was contributing about 6 points. But the real leaders on the blue-chip index were defensive stocks -- consumer staples company

Procter & Gamble

(PG) - Get Procter & Gamble Company Report

and smokestack industrial

Minnesota Mining & Manufacturing

(MMM) - Get 3M Company Report

together were adding more than 22 points.

Blue-chip tech stocks were holding the Dow back, though. Intel was sinking, down 2.4%, ahead of its earnings report tonight and after news of its acquisition of



, while PC maker


(IBM) - Get International Business Machines (IBM) Report

was down 0.9% and


(MSFT) - Get Microsoft Corporation (MSFT) Report

was tearing 3.2% lower.

Intel is buying Xircom for

$748 million. The company supplies PC cards and other products used to connect mobile computing devices to corporate networks and the Internet. Xircom was soaring, up 35.99%.

Despite weakness in most tech sectors, advancers were beating decliners by 19 to 16 on the Nasdaq exchange, indicating that there are buyers out there and that investors are picking and choosing their tech stocks carefully. Decliners were slightly ahead of advancers on the NYSE.

Network-equipment maker


(CSCO) - Get Cisco Systems, Inc. Report

was the most actively traded stock on the Nasdaq after CEO John Chambers said this morning that the company would gain market share in an economic slowdown. Chambers made the comments at a conference of industry leaders in India. Cisco was up 1.3% to $38.56.

Internet stocks were also a popular cause with investors today. Recently merged mammoth

AOL Time Warner

TheStreet Recommends


was rising 0.2% to $46.56,



was up 2.4% to $27.19 and Internet Sector

index was 1.3% higher to 364.7.

Meanwhile, companies' slowing spending on substantial investments -- such as IT networks and equipment -- continues to take its toll on the communications sector. Chip and mobile-phone maker



and networking company



both announced layoffs yesterday. Motorola said it would close a plant in Harvard, Ill., laying off

2,500 workers. And 3COM said it was

planning to lay off as much as 20% of its workforce next month in order to cut costs. Motorola was slipping 3.4%, while 3Com lately was off 3.6% to $10.

Meanwhile, energy stocks were in the mud amid the ongoing California electricity crisis and ahead of OPEC's meeting tomorrow.

One of the state's biggest utilities,

Southern California Edison Co.

-- a unit of

Edison International

(EIX) - Get Edison International Report

-- may be cut off from power suppliers after saying it can't pay hundreds of millions of dollars it owes to the

California Power Exchange

. The exchange, however, is in talks with various parties in order to avoid cutting the company off from further power purchases. Edison International shares were falling 8.6%.

The surging cost of wholesale power in the state this year coupled with caps on what can be charged to consumers has squeezed the company's coffers. Both it and the Pacific Gas & Electric utility unit of


(PCG) - Get PG&E Corporation Report

have said they are headed toward bankruptcy. PG&E was off 10.8%. The

American Stock Exchange Oil & Gas Index

was falling 0.7%.

The California crisis and concerns about energy costs in general have thrown the meeting of the OPEC ministers tomorrow into high relief. OPEC comprises representatives of the world's largest oil exporting nations. Market-watchers are expecting OPEC to cut output by 1.5 million barrels per day, which represents 5% of total output.

The U.S. is worried that the production cuts could force up energy prices, which would fuel inflation.

Elsewhere on the market, Ralston-Purina


was flying, trading higher on news that the pet food company is being sold to Swiss food giant


. Ralston-Purina was up a whopping 27.7%.

Nestle is paying $10.3 billion, or $33.50 a share, to buy the business, which will be called Nestle Purina Pet Care.

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Sector Watch

Semiconductor stocks were getting creamed, with the

Philadelphia Stock Exchange Semiconductor Index

falling 4.8% to 638.7. The

Philadelphia Stock Exchange Computer Box Maker Sector

was also down, lower by 2% to 128.3.

Utilities were also off -- the usually safe defensive is being hit with concerns about California -- with the

Dow Jones Utilities Average

down 2.8% to 335.8; while the still-safe defensive

Dow Jones Transportation Average

was up 1.2%.

The day's winners were insurance and banking stocks, while additional defensives -- like paper and drugs -- were also higher. The

S&P Insurance Index

was up 2.9%; the

Philadelphia Stock Exchange Forest & Paper Products Index

was up 1.7%.

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Bond prices were bouncing back this morning after plunging Friday. Some hotter-than-expected data that morning tempered expectations that the Fed would cut interest rates a full 50 basis points when it meets at the end of this month. The benchmark 10-year

Treasury note was lately up 1/32 to 103 23/32, yielding 5.250%.

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