By John J. Edwards III
Staff Reporter

Proving its helium pump has a cutoff switch after all, the

Dow Jones Industrial Average

today snapped its new-record streak at six with a modest loss in quiet trading.

The Dow dipped 9.95 to 7772.09, with

Procter & Gamble

(PG) - Get Report

,

American Express

(AXP) - Get Report

and

Travelers

(TRV) - Get Report

applying most of the pressure. But the broader

S&P 500

eked out another record, up 0.63 to 893.90, and the tech-filled

Nasdaq Composite Index

got a healthy bounce of 8.92 to a record 1431.95.

Market internals were mixed on moderate volume, as traders slowly returned from the near-summer weekend and looked forward to the week's plentiful economic data.

New York Stock Exchange

decliners barely edged advancers, 1,239 to 1,227, on volume of 418.5 million shares. On the Nasdaq, 2,176 advancers beat 2,091 decliners on 507.3 million shares.

After last week's remarkable gains, the bond market rallied still further on predata short covering. The yield on the benchmark 30-year Treasury eased to 6.69%.

Arthur Micheletti, chief economist and investment strategist at

Bailard Biehl & Kaiser

in San Mateo, Calif., said he was relieved that the market didn't extend what he saw as an overdone price explosion. "Our view is that the economy is going to come back and reaccelerate in the third and fourth quarter and the

Fed

is going to be raising interest rates, and that's not being discounted by the market at all," he said.

Micheletti agrees with most market observers that the central bank will hold off on raising short-term interest rates at its July 1-2 policy meeting, but he sees a hike at the Aug. 19 confab as a near-certainty. He said the recent economic data showing sluggishness have to be read in context.

"The slowdown should have been expected given the strength we had in the first quarter," which saw 5.8% growth in the gross domestic product, Micheletti said. "You take the two quarters together and we're still growing above trend growth." Second-quarter growth should be about 2%, he said.

Micheletti said he is most definitely not a member of the Wall Street chorus that's hailing the current low-inflation, high-growth environment as a permanent reality shift. "People keep saying we're in a new environment and it just doesn't get any better than this," he said. "Well, if it doesn't get any better than this, then the only way things can get is worse."

Monday's market action

:

A positive outlook from an industry stalwart and a plan to offer inexpensive network computers sent most PC stocks bouncing higher today.

Dell Computer

(DELL) - Get Report

reportedly said its momentum remains strong at home and abroad, and the company is "very pleased" with the current quarter. Dell also joined with other computer makers, including

Compaq

(CPQ)

,

IBM

(IBM) - Get Report

and

Hewlett-Packard

(HWP)

, in announcing plans to develop scaled-down, diskless "NetPCs" for businesses.

Intel

(INTC) - Get Report

and

Microsoft

(MSFT) - Get Report

will participate in the NetPC effort. Dell gained 4 3/16 to 115 3/8, Compaq gained 5 to 105 1/4, IBM edged up 1/4 to 89 1/4, Hewlett-Packard was unchanged at 53, Intel gained 2 9/16 to 147 1/4 and Microsoft gained 1 11/16 to an all-time high of 131 3/8.

America Online

(AOL)

rose 2 1/2 to a 52-week high of 61 on news that it reached more than 750,000 members outside the U.S. Also,

The Wall Street Journal

reported that AOL plans to introduce new online games that would cost subscribers extra to play.

Genesis Health Ventures

(GHV)

teamed with investment companies

Cypress Group

and

Texas Pacific Group

to offer $1.4 billion, or $28 per share, for

Multicare

(MUL)

. Multicare jumped 1 1/4 to an all-time high of 26 7/8 and Genesis moved up 1/4 to 35 3/8.

In other health-care news,

Merrill Lynch

hit the HMO group with a bunch of downgrades. The firm cut

Aetna

(AET)

,

United HealthCare

(UNH) - Get Report

and

WellPoint Health Networks

(WLP)

to intermediate-term accumulate from buy, maintaining long-term buy ratings. Merrill lowered

PacifiCare

(PHSYA)

to intermediate-term neutral from accumulate, maintaining a long-term buy. Aetna lost 3 1/4 to 109 1/2, United HealthCare lost 2 1/4 to 54 1/8, WellPoint lost 1 7/8 to 48 7/8 and PacifiCare lost 7/8 to 80 3/8. Aetna's decline came as it agreed to sell its

Healthcare Data Interchange

unit to

Envoy

(ENVY)

for $36.4 million. Envoy added 1/4 to 32 3/4.

Competitive local exchange carrier

McLeodUSA

(MCLD)

leapt 4 3/4 to 28 7/8 after announcing its definitive pact to acquire privately held

Consolidated Communications

for about $420 million in stock and cash.

Furman Selz

upgraded the stock to buy from neutral and placed it on the firm's recommended list.

Raymond

(RAYM)

fell 2 5/16 to 32 3/4 after

BT Industries

of Sweden agreed to buy the materials-handling concern for $33 per share. The deal sent Raymond's executives into paroxysms of defensive spinning, given that Raymond closed Friday at 35 1/8. CEO Ross Colquhoun pointed out that $33 per share does represent a 27% premium to Raymond's Feb. 28 closing price of 26; on that day, the company said it planned to boost shareholder value.

Tobacco stocks were mixed to lower as settlement talks with antitobacco state attorneys general continued.

Philip Morris

(MO) - Get Report

lost 5/8 to 45 5/8,

RJR Nabisco

(RN)

lost 1/2 to 34,

Gallaher Group

(GLH:NYSE) lost 1/4 to 19 1/2 and

Lorillard

parent

Loews

(LTR)

edged up 1/8 to 103 1/8.

KeyCorp

(KEY) - Get Report

agreed to acquire home-equity finance company and tireless advertiser

Champion Mortgage

("When your bank says no, Champion says YES") for undisclosed terms that include the issuance of $200 million in stock to Champion. KeyCorp was unchanged at 56 5/8.

Quickturn Design Systems

(QKTN)

exploded up 2 13/16 to 15 7/8 after

Morgan Stanley

upgraded the stock to outperform from neutral.

Tellabs

(TLAB)

jumped 3 9/16 to an all-time high of 52 1/4 on an upgrade to strong buy from buy at

Alex. Brown

.

MicroTouch Systems

(MTSI) - Get Report

surged 1 7/8 to 23 after an arbitrator ruled the company must pay $595,000 to settle a dispute with its former Japanese distributor,

Nissha Printing

. Sounds like bad news, doesn't it? Maybe, but not compared to the $2 million that MicroTouch had feared it might owe.

W.R. Grace

(GRA) - Get Report

rose 1/8 to an all-time high of 57 3/8 after Morgan Stanley upgraded the stock to strong buy from neutral. The firm upped its price target on Grace to 72 from 60 and raised its 1998 earnings expectation to $4 per share from $3.75. The

First Call

consensus estimate is $3.94.

Anchor Gaming

(SLOT)

racked up a gain of 2 3/8 to 40 after the company said analysts' fourth-quarter earnings estimates may be too conservative. First Call's consensus calls for 69 cents per share versus 54 cents a year earlier. Also, the company said its chief financial officer, Sal DiMascio, resigned. Anchor is looking for a replacement.

Fila

(FLH)

, up 1 5/8 to 60 3/4, and

Reebok

(RBK)

, up 2 to 44 5/8.

Also battered on an earnings warning was

Checkmate Electronics

(CMEL)

, which was slammed 1 3/4 to 8 1/4 after saying it might not exceed break-even results in the second quarter. First Call was looking for a profit of 23 cents per share.

NatWest Securities

cut Checkmate to hold from buy, lowering its 12-month price target to 13 from 18. NatWest reduced its second-quarter estimate on Checkmate to a loss of 2 cents from a profit of 23 cents, cut its full-year 1997 view to 30 cents from 75 cents and cut its 1998 view to 67 cents from 99 cents.

DuPont

(DD) - Get Report

gained 1 to 59 7/8 despite a downgrade to perform-in-line from outperform at

Schroder Wertheim

.

Complete Business Solutions

(CBSL:Nasdaq) gained 3 1/4 to a post-offering high of 25 3/4 after it received an unspecified "multimillion-dollar" contract from

Scana's

(SCG)

South Carolina Electric & Gas

unit for a Year 2000 computer-fix project. Scana dimmed 1/8 to 25.

Oil and natural gas company

Flores & Rucks

(FNR)

rose 1 3/8 to 48 7/8 after Morgan Stanley started coverage at strong buy.

Briggs & Stratton

(BGG) - Get Report

fell 1 to 51 3/4 after

Oppenheimer

downgraded the stock to market perform from buy.

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