Morning Strength Yields to a Mixed Midday as Dow Falters

Blue-chip stocks prove unable to hold their gains, while the tech sector slips but remains on the plus side.
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After yesterday's selloff, a ho-hum morning didn't seem like such a bad thing.


Dow Jones Industrial Average

gave up modest, early gains and has skidded harshly in the last hour, while other major indices were mixed with stocks trading in a narrow range. The general mood at midday was one of low expectation, or

No Expectation

, as the

Rolling Stones

would sing.

The market is "absorbing yesterday's shock very well," said Jim Maguire, managing director at

Henderson Brothers

, a specialist trading firm at the

New York Stock Exchange

. He spoke before the Dow's recent slide. "We did not have a real follow-through on yesterday's selloff. There is still confidence around, and some are doing a little bargain hunting," said Maguire, noting that oil prices have stabilized after a run-up yesterday, a sign he viewed as encouraging.

Tech stocks were something of a bright spot, however, with the tech-laden

Nasdaq Composite Index

up 11 to 2651. Still, that was well off its intraday high of 2676.45, set around 11 a.m.


(MSFT) - Get Report



(INTC) - Get Report



(DELL) - Get Report



(ORCL) - Get Report

were all trading in slightly positive territory.

"The market is not up as much as I would have liked it, but there is some movement in the Nasdaq stocks, so that's encouraging," said Doug Myers, vice president of equity trading at

Wachovia Securities

in Atlanta. "That means someone is going back in and buying" the slightly battered stocks, he said. "I'm hoping it will hold."

Still, no one anticipates any real action today, and judging by past summer Fridays, most traders are just killing time, waiting for the closing bell and the end of a volatile week.

"My sense is that the market is going nowhere fast," said Alan Ackerman, executive vice president of


. "It appears there are growing concerns that there may be higher inflation signals in the pipeline. Whether this is perception or a reality, it has tempered buying considerably and most traders and investors are in no hurry to do any bargain-hunting."

The Dow was down 75, or 0.7%, to 10,717 and the broader

S&P 500

was off 4 to 1337. The small-cap

Russell 2000

remained in the green, lately up 1 to 443. Internet Sector

index was suffering under the weight of

(AMZN) - Get Report




, among others, declining 9, or 1.6%, to 553.

On the Big Board, advancers were beating decliners 1,411 to 1,326 on 379 million shares. On the

Nasdaq Stock Market

, 1,771 advancers were outpacing 1,698 decliners on 467 million shares. New 52-week lows were leading new highs 111 to 35 on the NYSE, but new highs were on top 60 to 36 on the Nasdaq.

The bond market was unable to get anything going, instead extending yesterday's downdraft. The benchmark 30-year Treasury was off 18/32 to 88 5/32, its yield swelling to 6.12%. (For more on the fixed-income market, see today's early

Bond Focus.)

Friday's Midday Watchlist

By Thomas Lepri
Staff Reporter


Earnings estimates from First Call; new highs and lows on a closing basis unless otherwise specified. Earnings reported on a diluted basis unless otherwise specified.


American Express

(AXP) - Get Report

was putting some heavy downward pressure on the Dow, lately down 5 5/16, or 3.8%, to 133 1/4 -- that's a loss of 26.91 points for the blue-chip index. The company said yesterday that Vice Chairman and CFO Richard Goeltz was stepping down.

Upside earnings aren't helping S&P 500 utility firm



today. GPU reported second-quarter operating earnings of 84 cents a share, well above the 14-analyst consensus of 66 cents and up from last year's 62 cents. But GPU was lately off 1 3/4 to 38 5/16, as the company acknowledged the role that the recent extraordinarily hot weather has played in juicing its numbers this quarter.

Meanwhile, S&P 500 bedfellow

Cardinal Health

(CAH) - Get Report

was surging 4 3/8, or 6.9%, to 68 3/4 after it posted fourth-quarter operating earnings of 58 cents a share, a penny ahead of the 15-analyst estimate and up from the year-ago operating earnings of 46 cents.

Mergers, acquisitions and joint ventures

Chicago Title

(CTZ) - Get Report

was advancing 5 1/8, or 14%, to 41 13/16 following a report in the

Los Angeles Times

to the effect that fellow title insurer

Fidelity National Financial

(FNF) - Get Report

is in talks to acquire it in a transaction that could be valued at about $1.4 billion. Citing people familiar with the discussions, the paper wrote that, in the event of a deal, both companies would keep their names and identities.

Source Media


was rising 7/16 to 12 5/8 on last night's news that it has signed a deal to form an interactive-TV portal in a joint venture with

Insight Communications


, which was lately off 1/8 to 28 13/16.

Earnings/revenue reports and previews

Electronic Data Systems


was off 1 1/16 to 61 1/16 after yesterday reporting second-quarter earnings of 44 cents a share, a penny better than the 19-analyst estimate and up from the year-ago 39 cents.


(FTS) - Get Report

was slipping 1 3/4, or 4.6%, to 36 11/16 despite its solid second-quarter earnings report. The company said it earned 83 cents a share in the quarter, beating the five-analyst estimate of 81 cents and up from the year-ago 69 cents.



was up 4 15/16, or 8%, to 67 1/2 after

TV Guide


President Peter Boylan told analysts on a conference call that his company was on the verge of settling two patent-infringement lawsuits Gemstar has filed over TV Guide's interactive program guides.

Lam Research

(LRCX) - Get Report

was surging 8 1/8, to 17.6%, to 54 5/16 after it last night reported second-quarter earnings of 28 cents a share, blowing past the 19-analyst estimate of 12 cents a share and up from the year-ago 5-cent loss. Three brokerages got on the Lam today:


raised it to buy from market perform;

Goldman Sachs

upped it to its recommended list from market outperform; and

Warburg Dillon Read

hiked Lam to strong buy from buy.

Web ad agency

Modem Media.Poppe Tyson


was rocketing up 5 5/16, or 25.6%, to 26 1/2 after it yesterday reported second-quarter earnings of 5 cents a share, confounding the three-analyst prediction of a 6-cent loss and up from the year-ago loss of 11 cents.


(SOI) - Get Report

was off 7/16 to 21 7/16 after posting second-quarter earnings of 61 cents a share, in line with the 10-analyst estimate and up from the year-ago 58 cents.

Tommy Hilfiger


was down 1 1/8 to 37 1/2 after it reported first-quarter earnings of 40 cents a share, ahead of the 15-analyst estimate of 37 cents and up from the year-ago 30 cents.

Offerings and stock actions

The latest two Net offerings are enjoying very respectable debuts today.

Intermedia Communications





was moving up 4 7/16, or 26.1%, to 21 7/16, having been priced top-range at $17 a share yesterday by lead underwriter

Bear Stearns

. And


(NTIQ:Nasdaq) was lately up 2 3/4, or 21.2%, to 15 3/4 after being priced top-range at $13 a share last night by

Credit Suisse First Boston


Martha Stewart Living Omnimedia

, which comprises

Martha Stewart's

print, television, radio and Internet businesses, filed yesterday with the

Securities and Exchange Commission

to offer as much as $100 million of stock.

Medical malpractice liability insurer



was also getting a good pop in its trading debut, lately up 4 1/4, or 31.4%, to 17 3/4.

Web telephony firm



was continuing to climb higher in its second day of trading, lately up 2 9/16, or 9.7%, to 29 1/8. Net2Phone yesterday gained 77.1% in its trading debut.

Analyst actions



was tumbling 4 1/4, or 5.4%, to 73 5/16 after

Warburg Dillon Read

analyst Saul Rubin cut it to buy from strong buy, reducing his target price on the company to 92 from 115.

Goldman Sachs

also weighed in on DaimlerChrysler, cutting its earnings-per-share estimates to 5.95 euros from 6.49 euros for 1999, and to 6.30 euros from 6.58 euros for 2000.

Glaxo Wellcome


was up 1 1/16 to 52 1/4 despite

Salomon Smith Barney's

downgrading of the company to neutral from outperform following its warning yesterday that it wouldn't meet its target of double-digit sales and earnings growth for 1999.


First Union


was off 1 5/8 to 46 3/8 after John Georgius resigned yesterday as president of the troubled bank. The company named Ken Thompson, its vice chairman of global capital markets, to replace Georgius when he retires at the end of the year.