The major stock indices ended mostly lower with the exception of the

Nasdaq Composite Index

, which managed to close at a new record high while the Treasury market suffered heavy losses.

The Nasdaq Comp advanced 4.32, or 0.2%, to 2510.21. The

Dow Jones Industrial Average

slumped 13.13 or 0.1, to 9345.70, while the

S&P 500

dropped 6.62, or 0.5%, to 1273.02. The

Russell 2000

fell 1.14, or 0.3%, to 426.08.

TheStreet.com Internet Sector

index tumbled 9.63, or 1.7%, to 547.89.

Late this afternoon,

America Online

(AOL)

said it is buying

MovieFone

(MOFN)

for $388 million in stock. AOL fell 4 3/4 to 171. Trading was halted in MovieFone late this afternoon, with the last quote on the stock at 26 1/2. This morning the company said it was engaged in discussions that could result in the company's sale.

The major stock indices traded in a relatively narrow range throughout the session.

The 30-year Treasury bond was down 1 13/32 to 101 4/32, yielding 5.18%, in part on stronger-than-expected news on the economy. The

National Association of Purchasing Management's

January index rose to 49.5 from a revised 45.3 reading in December. A reading above 50 indicates that the manufacturing economy is generally expanding; below 50 indicates that it is generally contracting. Looming supply also weighed on Treasuries.

Looking ahead, tomorrow kicks off a two-day meeting of the

Federal Open Market Committee

. It is widely expected the Fed will leave short-term interest rates unchanged. Tomorrow is also Groundhog Day.

On the

New York Stock Exchange

, decliners beat advancers 1,638 to 1,359 on 799 million shares. On the

Nasdaq Stock Market

losers beat winners 2,392 to 1,759 on 952 million shares.

On the NYSE, 81 issues set new 52-week highs while 57 touched new lows. On the Nasdaq, 131 issues set new highs while new lows totaled 54.

On the Big Board,

Compaq

(CPQ)

was most active with 19.8 million shares changing hands. It was down 11/16 to 46 15/16.

On the Nasdaq,

Dell

(DELL) - Get Report

was most active, with 42.9 million shares changing hands. It was up 7 15/16, or 7.9%, to 108 1/8. It hit a 52-week intraday high earlier when it peaked at 110.

Market data above are preliminary. Updated numbers and analysis will follow in the Market Roundup

.

2:53 p.m.: Nasdaq Continues to Lead March Higher

The

Nasdaq Composite Index

was heading into the final hour of trading up 1% as all of the market's major indices were in the green.

The Nasdaq Comp was up 25 to 1282. From its Oct. 8 closing low to this afternoon, the Nasdaq Comp has rallied about 78%.

The

Dow Jones Industrial Average

was up 55 to 9414. The

S&P 500

was up 2 to 1282. The

Russell 2000

was up 1 to 428.

TheStreet.com Internet Sector

index was up 4 to 561.

"The Nasdaq is propelling the market forward overall," said Peter Coolidge, managing director of equity trading at

Brean Murray Foster Securities

. "The momentum from last week is continuing on."

Right now, the market is riding on "fumes of momentum," he said.

Coolidge said there are a lot of positives already priced in the market, including a "relatively good" earnings season.

In the Treasury market, stronger-than-expected economic data in part sent the 30-year Treasury bond sharply lower. The long bond was down 1 18/32 to 100 31/32, yielding 5.19%. The

National Association of Purchasing Management

reported its January index rose to 49.5 from a revised 45.3 reading in December. A reading above 50 indicates that the manufacturing economy is generally expanding; below 50 indicates that it is generally contracting.

Looking ahead, tomorrow kicks off a two-day meeting of the

Federal Open Market Committee

. It is widely expected the Fed will leave short-term interest rates unchanged.

Topping economic news this week, on Friday, the January

employment

report is slated for release.

On the

New York Stock Exchange

, decliners were beating advancers 1,555 to 1,381 on 600 million shares. On the

Nasdaq Stock Market

losers were beating winners 2,212 to 1,791 on 723 million shares.

Although decliners were beating advancers, new highs were beating new lows, and up volume on both the Big Board and Nasdaq was beating down volume.

On the NYSE, 74 issues had set new 52-week highs while 48 had touched new highs. On the Nasdaq, 127 issues had set new highs while new lows totaled 48.

On the Big Board,

Compaq

(CPQ)

was most active, with 17 million shares changing hands. It was flat at 47 5/8.

On the Nasdaq,

Dell

(DELL) - Get Report

was most active, with 33 million shares changing hands. It was up 8 1/4, or 8%, to 108 5/16.

1:57 p.m.: Most Indices Posting Gains

With the exception of the

S&P 500

, the major market barometers were slightly higher this afternoon.

The S&P 500 was down 1 to 1279. Within the S&P 500, the basic materials and transportation industry groups were strong while the utility sector was weak.

The

Dow Jones Industrial Average

was up 41 to 9400. The

Nasdaq Composite Index

was up 15 to 2520. The

Russell 2000

was up fractionally at 428.

TheStreet.com Internet Sector

index was up 9 to 567.

Strong economic news along with looming supply knocked the 30-year Treasury bond lower. It was down 1 20/32 to 100 29/32, yielding 5.19%. The

National Association of Purchasing Management

reported its January index rose to 49.5 from a revised 45.3 reading in December. A reading above 50 indicates that the manufacturing economy is generally expanding; below 50 indicates that it is generally contracting.

The brokerage, gold mining, forest and paper product, and airline sectors were handing in a strong performance. The

American Stock Exchange Broker/Dealer Index

was up 3%; the

Philadelphia Stock Exchange Gold and Silver Index

was up 2%; the Philadelphia Stock Exchange Forest & Paper Products Index has risen 1%; and the

Amex Airline Index

was up 3%.

On the

New York Stock Exchange

, decliners were beating advancers 1,553 to 1,322 on 504 million shares. On the

Nasdaq Stock Market

losers were beating winners 2,178 to 1,744 on 619 million shares.

On the NYSE, 72 issues had set new 52-week highs while 39 had touched new lows. On the Nasdaq, 118 issues had set new highs while new lows totaled 45.

On the Big Board,

Compaq

(CPQ)

was most active, with 14 million shares changing hands. It was down 5/8 to 47. Compaq said sales of its new

Prosignia

personal computer line, which are sold directly over the phone and via the Internet, jumped to more than $1 million a day after two months,

The Wall Street Journal

reported.

On the Nasdaq,

Dell

(CPQ)

was most active with 27 million shares changing hands. It was up 8 7/16 to 108 1/2.

In the news,

Oracle

(ORCL) - Get Report

was up 4 1/2, or 8%, to 59 15/16, after it set a 3-for-2 stock split. The stock hit a 52-week intraday high earlier when it peaked at 59 3/16.

Sector Focus: Chemicals

News that

Rohm & Haas

(ROH)

is buying

Morton International

(MII)

in a cash and stock transaction valued at $4.9 billion, including the assumption of $268 million of debt, shot shares of Morton sharply higher and in turn has helped lift the

S&P Chemicals Index

up 2%. However, so far in the young year, the index is down about 1.7%.

The biggest winner in the index was, as one might guess, Morton, which has jumped 9 7/8, or 38%, to 35 3/4. Acquirer Rohm & Haas was up 1/8 to 31 1/8.

The deal will create a global specialty chemical company with combined annual revenues of $6.5 billion.

Among some of the other components in the index:

Dupont

(DD) - Get Report

was up 9/16 to 51 3/4;

Union Carbide

(UK)

was down 1/8 to 39 7/16;

Eastman Chemical

(EMN) - Get Report

was down 3/8 to 40 1/4; and

Dow Chemical

(DOW) - Get Report

was up 2 9/16 to 90 5/8.

12:49 p.m.: Midday Musings: Market Seeks to Find Itself, Without Much Success

12:03 p.m.: Stocks Remain Narrowly Mixed

The

S&P 500

and the

Nasdaq Composite Index

were both under water late this morning as the market has traded in a relatively narrow range so far this session.

The S&P 500 was down 7 to 1273. The Nasdaq Comp was down 5 to 2500. The

Dow Jones Industrial Average

was up 11 to 9370. The

Russell 2000

was up fractionally at 427.

TheStreet.com Internet Sector

was up 5 to 563.

On the economic front, the

National Association of Purchasing Management's

January index rose to 49.5 from a revised 45.3 reading in December. A reading above 50 indicates that the manufacturing economy is generally expanding; below 50 indicates that it is generally contracting.

Bank and utility stocks were taking a beating. The

Philadelphia Stock Exchange/KBW Bank Index

was down 2%. The

Dow Jones Utility Average

was down 1%.

On the plus side, airline stocks -- thanks to news of fare increases -- were enjoying solid gains. The

American Stock Exchange Airline Index

was up 2%.

In the Treasury market, the 30-year bond was lately down 1 7/32 to 101 10/32, yielding 5.16%. (For more on the fixed-income market, see today's early

Bond Focus.)

On the

New York Stock Exchange

, decliners were beating advancers 1,525 to 1,230 on 341 million shares. On the

Nasdaq Stock Market

losers were beating winners 2,030 to 1,586 on 416 million shares.

On the NYSE, 61 issues had set new 52-week lows while 28 had touched new highs. On the Nasdaq, 102 issues had set new highs while new lows totaled 33.

On the Big Board,

Compaq

(CPQ)

, was most active, with 11 million shares changing hands. It was down 1 1/4 to 46 7/16. Compaq said sales of its new

Prosignia

personal computer line, which are sold directly over the phone and via the Internet, jumped to more than $1 million a day after two months,

The Wall Street Journal

reported.

On the Nasdaq,

Dell

(DELL) - Get Report

was most active, with 17 million shares changing hands. It was up 4 3/8 to 104 7/16.

Tech Focus

Among the tech indices, the

Philadelphia Stock Exchange Computer Box Maker Index

was down fractionally. The

Morgan Stanley High-Tech 35

was down 1%. The

Nasdaq 100

was down 1%. Earlier, the Nasdaq 100 hit a 52-week intraday high at 2144.41, before easing off that level.

The

Philadelphia Stock Exchange Semiconductor Index

was down 2%. It too hit a 52-week intraday high this morning at 244.53.

In the news today,

AT&T

(T) - Get Report

and

Time Warner

(TWX)

have formed a joint venture to offer telephone service over Time Warner's cable television wires. AT&T will own 77.5% of the venture while Time Warner will own 22.5%. AT&T said it expects the venture will have earnings after three years with annual revenues of $4 billion. Separately, AT&T said it will sell its prepaid telephone calling cards in

Wal-Mart's

(WMT) - Get Report

Wal-Mart

and

Sam's Clubs

stores. AT&T was up 1 7/16 to 92 3/16, while Time Warner was up 1 1/4 to 63 3/4.

Shares of

Cisco

(CSCO) - Get Report

gained ahead of its second-quarter earnings report tomorrow and was up 1 3/8 to 113 1/8. The

First Call

29-analyst estimate calls for earnings of 35 cents a share.

In the Newsletters

Longtime

Intel

(INTC) - Get Report

loyalist

Gateway 2000

(GTW)

is preparing to introduce in March personal computers based on the forthcoming

K6-3

chip from

Advanced Micro Devices

(AMD) - Get Report

, according to

PC Week Online

. Gateway has been evaluating the AMD chip, code-named "Sharptooth," for some time, according to sources,

PC Week Online

reported.

More significant than the forthcoming Gateway systems is the negative impact Gateway's move to AMD -- and others like it by Gateway rivals -- could have on Intel, the article said.

On the news, AMD surged 2, or 9%, to 24 15/16, while Intel fell 3 5/8 to 137 5/16. Gateway was off 11/16 to 76 9/16.

11:01 a.m.: Stocks Turn Narrowly Mixed

After popping early on, the major stock gauges were narrowly mixed.

The

Dow Jones Industrial Average

was up 20 to 9379. The

Russell 2000

was up fractionally at 428. The

S&P 500

was down 5 to 1274. The

Nasdaq Composite Index

was up 4 to 2510.

TheStreet.com Internet Sector

index was up 6 to 564.

"I think we've seen the best prices of the quarter," said Dick Stein, chief technical analyst at

Noble Financial Group

.

He said the strong open today was due to beginning-of-the-month IRA, 401K and pension money flowing into the market. He said the market will "usually get two days

of gains out of this."

Merger news from Europe and the U.S. also helped lift stocks early on.

As for earnings, he said most of the good earnings reports are already out.

He said it is time for investors to take some profits.

Looking ahead to March and April, Stein sees the market being under some pressure as market participants sell stock to pay their tax bills.

The 30-year Treasury bond was down 27/32 to 101 22/32, yielding 5.14%

On the economic front today, the

National Association of Purchasing Management's

January index rose to 49.5 from a revised 45.3 reading in December. A reading above 50 indicates that the manufacturing economy is generally expanding; below 50 indicates that it is generally contracting.

The NAPM report comes on the heels of Friday's news from the

Commerce Department

, which said

gross domestic productP

in the fourth quarter grew 5.6%.

Meanwhile, Bruce Steinberg,

Merrill Lynch

chief economist, today raised his GDP forecast for 1999. He now sees GDP rising 3% to 3.5% in 1999. Also, Steinberg raised his estimate for operating earnings for companies in the S&P 500 to $46 a share, up 3.5% from 1998.

On the

New York Stock Exchange

, decliners were beating advancers 1,364 to 1,278 on 223 million shares. On the

Nasdaq Stock Market

, losers were beating winners 1,762 to 1,531 on 287 million shares.

On the NYSE, 50 issues had set new 52-week lows while 20 had touched new highs. On the Nasdaq, 89 issues had set new highs while new lows totaled 23.

On the Big Board,

Compaq

(CPQ)

, was most active, with 9 million shares changing hands. It was down 1 1/4 to 46 3/8. Compaq said sales of its new

Prosignia

personal computer line, which are sold directly over the phone and via the Internet, jumped to more than $1 million a day after two months,

The Wall Street Journal

reported.

On the Nasdaq,

Dell

(DELL) - Get Report

was most active, with 13 million shares changing hands. It was up 4 7/16 to 104 1/2.

9:56 a.m.: Merger News Boosts Stocks

Merger news from Europe and the U.S. helped lift stocks early on, with the

Nasdaq Composite Index

leading the way.

The Nasdaq Comp was up 16 to 2522. The

Dow Jones Industrial Average

was up 57 to 9416. The

S&P 500

was up 3 to 1283. The

Russell 2000

was up 2 to 429.

TheStreet.com Internet Sector

was up 8 to 565.

The 30-year Treasury bond was down 15/32 to 102 3/32, yielding 5.11%.

In Europe,

Societe Generale

said it's buying

Paribas

, while

Axa's

(AXA)

U.K. unit,

Sun Life & Provincial Holdings

, said it's acquiring

Guardian Royal

of Britain.

Topping deals in the U.S.,

Rohm and Haas

(ROH)

said it is buying

Morton International

(MII)

in a cash and stock transaction valued at $4.9 billion, including the assumption of $268 million of debt.

In other news,

Oracle

(ORCL) - Get Report

set a 3-for-2 stock split.

Most Up at Open -- NYSE

STMicroelectronics (STM) - Get Report, up 2 to 106 1/2

.

Most Up at Open -- Nasdaq

E*Trade (EGRP) , up 5 5/16 to 60 1/2

.

Most Down at Open -- NYSE

Xerox (XRX) - Get Report, down 1 3/8 to 122 5/8

: The company said it is cutting prices on a number of its personal printing products.

Most Down at Open -- Nasdaq

Inso (INSO) , down 15 1/2 to 9 1/2

: The company said it forecasts a loss for both the fourth quarter and full year.