Mixed Session Reflects Wall Streeters' Jitters

Tech stocks are rallying on, but the Dow has struggled on the downside for most of the day.
Publish date:

Who's afraid of the big bad


? Judging from today's market activity, lots of nervous investors who think Tuesday's move toward a tightening bias may be a prelude to


blowing the market down with a future interest-rate hike.

But market movers aren't putting all the blame on the Fed. Earnings and gold are doing their fair share to deflate yesterday's gains, as skepticism returns to the Street.

"We're looking for the market to pull back considerably with every economic report putting volatility into the market," said Ronny Kraft, CEO of

Gotham Capital Management

. "People are excited with third-quarter numbers," he said, referring to



strong report. "But last quarter, 65% of companies gave positive earnings surprises and 42% of them traded down after they reported, and that's when we saw the selloff. In the first quarter, we had 68% report positive earnings surprises and only 25% trade down. That's nearly twice the amount."

Gold is continuing to bring increasing woes to the market, as money managers struggle to rid themselves of short positions. "Movement in gold can bring a financial blow-up and the reason be behind it is that there is an outrageous short position out there," Kraft said. "Anyone that is short gold is in trouble." He was referring to today's

Wall Street Journal

Heard on the Street article that cited

Republic New York



Goldman Sachs

(GS) - Get Report


Societe Generale


Credit Suisse First Boston



as some of the dealer's with large exposure to the troubled

Ashanti Goldfields



By midsession, the

Dow Jones Industrial Average

was off 29 to 10,559, with


(IBM) - Get Report



(AA) - Get Report

weighing it down.

After falling short of record closing stats

yesterday, the tech-heavy

Nasdaq Composite Index

was surging 24, or 0.8%, to 2881. Yahoo! was doing its part to fuel the index, after its solid earnings report had the stock had the stock pumping up 8.1%.

On the

New York Stock Exchange


Barnes & Noble

(BKS) - Get Report

was sliding 10.4% after

J.P. Morgan

sliced its rating on its shares to market perform from long-term buy, while

American Home Products


was gaining weight, up 3 1/8, or 6.9%, to 48 1/4, after announcing a proposed settlement in the lawsuit over the fen-phen diet cocktail. AHP also announced restructuring plans for its



Shares of

BMC Software


sank 8 1/8, or 11.5%, to 61 7/8 after the company said second-quarter profits would miss consensus estimates, while



, jumping 6 1/8, or 18.8%, to 38 11/16, and


(AMZN) - Get Report

, mounting 6 5/16, or 7.7%, to 88 11/16, were following Yahoo!'s lead.

Other stock proxies were mixed with the broad

S&P 500

down slightly, 1 to 1324, while the small-cap

Russell 2000

was sliding 1 to 429.

TheStreet.com Internet Sector

index was also getting a boost from Yahoo!'s flight, and coupled with gains from



, the index was leaping 23, or 3.1%, to 731.

In other Big Board news, decliners were leveling advancers, 1,643 to 1,154 on 489 million shares, while on the

Nasdaq Stock Market

, laggards were edging out leaders 1,843 to 1,753 on 766 million shares. The new 52-week lows were pummeling new highs on the NYSE, 74 to 36, while on the Nasdaq new highs were beating out lows 103 to 65.

On the bond front, the benchmark 30-year Treasury was down 1/32 to 99 8/32, its yield at 6.18%. (For more on the fixed-income market, see today's early

Bond Focus.)

Thursday's Midday Watchlist

By Eileen Kinsella
Staff Reporter

Shares of IPO



rocketed 15 9/16, or 97.3% to 31 3/4 after being priced top-range at $16. The company is an online destination for prescription drugs, herbs and other medical supplies.


wrote about PlanetRx.com in a story

this morning.

Webvan: Join the discussion on


Message Boards.

In response to

Securities and Exchange Commission




said it is postponing its initial public offering, originally slated for this week. According to a report in Thursday's editions of

The Wall Street Journal

, the SEC is worried about Webvan's possible failure to observe quiet-period restrictions in giving pre-IPO interviews to

Business Week



as well as its dissemination during road-show presentations of information not included in its prospectus. Details of the road show were brought to light by

Adam Lashinsky's

column yesterday, which earned mention in today's



Two more major online brokerages --





-- said they'd be joining the after-hours trading party in the not-too-distant future.

Both Fidelity, the brokerage unit of the mutual fund giant, and DLJdirect, a unit of investment bank

Donaldson Lufkin & Jenrette


, plan to trade Nasdaq and some listed stocks through the


electronic communication network, in which they and

Charles Schwab


each hold 25% stakes.

Spear Leeds & Kellogg

owns the remaining 25%.

Fidelity's hours for retail trading will now include a 4:30 p.m. through 8 p.m. EDT session. DLJdirect is planning trading for both the morning from 8 a.m. to 9:15 a.m. and the evening from 4:15 p.m. to 7 p.m. Schwab

earlier this week said it would trade from 4:30 p.m. to 7 p.m. on the REDIbook network.

DLJdirect was up 3/4 to 16 11/16.


Caroline Humer

Mergers, acquisitions and joint ventures

Bell Atlantic


lost 5/8 to 66 1/16 after saying it is acquiring $550 million of

Metromedia Fiber Network's


optic infrastructure. Metromedia moved up 1 7/8, or 6%, to 33 3/16. Bell Atlantic will invest about $700 million to purchase about 9.9% of the equity of MFN via the purchase of newly issued shares at $28 a share. Also, Bell Atlantic will buy about $975 million in debt securities convertible into common stock at a conversion price of $34 per share, boosting Bell Atlantic's potential equity investment in MFN to about 19% of the company.



dropped 3 3/16, or 5.8%, to 51 3/4 after agreeing to acquire privately held


, a supplier of Internet marketing software, in a stock deal worth about $275 million. Macromedia also unveiled alliances with



lately down 3/8 to 30 7/8, and


(BVSN) - Get Report

which rose 2 5/8 to 164. Macromedia said it plans to issue about 5 million shares of stock in the connection with the acquisition and take one-time charges of up to $5 million in its current quarter.

Earnings/revenue reports and previews


Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.


Advanced Micro Devices

(AMD) - Get Report

slipped 1/4 to 19 3/16 after last night reporting a third-quarter loss of 72 cents a share, narrower than the 18-analyst estimate of a loss of 97 cents but worse than the year-ago earnings of 1 cent.


(COST) - Get Report

inched up 11/16 to 79 7/16 after posting fourth-quarter earnings of 79 cents a share, beating the 22-analyst estimate of 76 cents and the year-ago 65 cents.

General Electric

(GE) - Get Report

slipped 13/16 to 122 7/8 despite posting third-quarter earnings of 80 cents a share, a penny ahead of the 13-analyst estimate and up from the year-ago 69 cents. Revenue jumped to a record $27.2 billion, a 13% increase over the year-ago period.

Goody's Family Clothing


climbed 1, or 12%, to 9 5/16 after it said September same-store sales rose 4.8%.

In Focus Systems


added 3 1/2, or 19.1%, to 21 7/8 after posting third-quarter earnings of 31 cents a share, beating the seven-analyst estimate of 23 cents and the year-ago 8 cents.


(S) - Get Report

slipped 15/16 to 32 7/8 despite posting a 4.1% increase in September same-store sales.

Yahoo! flew 14 1/4, or 8.1%, to 190 after last night reporting third-quarter earnings of 14 cents a share before charges, ahead of the 26-analyst estimate of 9 cents a share, and up from the year-ago 2 cents before items.

Deutsche Banc Alex. Brown


U.S. Bancorp Piper Jaffray


Lehman Brothers

all raised ratings and/or earnings expectations on Yahoo!.

Offerings and stock actions

Neuberger Berman

(NEU) - Get Report

slipped 7/16 to 31 9/16 in its trading debut after being priced at $32 a share by Goldman.

Shaw Group


added 1/2 to 21 1/4 after it announced plans for a 2.5 million-share secondary offering.


(UGP) - Get Report

slipped 3/8 to 13 1/8 after

Morgan Stanley Dean Witter

priced 11.9 million ADRs at $13.50 each, the bottom of the estimated range. One ADR is equal to five ordinary shares.

Analyst actions



climbed 1 5/16 to 62 7/8 after Deutsche Banc raised its rating to strong buy from market perform.

Barnes & Noble fell 2 3/4, or 10.4%, to 23 3/4 after

J.P. Morgan

lowered its rating to market perform from long-term buy.

Concentric Network


added 11/16 to 17 15/16 after


initiated coverage with a neutral rating.



climbed 1 7/8, or 7.6%, to 26 1/2 after PaineWebber initiated coverage with a buy rating.


(EBAY) - Get Report

climbed 4 5/8 to 156 1/4 after Deutsche Banc raised its price target to 175 a share.

First Health Group


climbed 1/8 to 22 1/4 after

Merrill Lynch

raised its rating to accumulate from intermediate-term neutral.



fell 3 1/8, or 6.5%, to 45 5/16 after PaineWebber initiated coverage with a neutral rating.

Health Management Associates


fell 1/8 to 7 5/8 after Merrill upped its intermediate-term opinion to accumulate from neutral.


(IR) - Get Report

rose 5/8 to 56 11/16 after Merrill raised its rating to intermediate-term buy from accumulate.

Service Corp.

(SRV) - Get Report

slipped 11/16 to 7 15/16 after J.P. Morgan cut its rating to market perform from buy.



climbed 2 5/8, or 8.2%, to 34 3/4 after PaineWebber initiated coverage with an attractive rating.



(BC) - Get Report

slipped 7/16 to 24 3/16 after saying it would take an after-tax charge of $31 million, or 33 cents a share. The company settled three lawsuits relating to the sale of its boat engines.



lost 1/16 to 5 5/16 after Chairman and CEO Bill Schmidt resigned after less than six months in the post. Schmidt also quit as a board member and will be replaced by Jim Jannard, who founded the company in 1975.



said it will further delay the filing of its second-quarter earnings report and may be delisted if Nasdaq does not grant it an extension.