Playing the Stock Game -- Sometimes You Lose

Consumer stocks again weighed heavily on the Dow after being sharply higher earlier in the day.
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SAN FRANCISCO -- Today was nothing like yesterday, when being long stocks was like love -- an easy game to play.

After moving higher at the opening bell, major stock proxies struggled for much of the rest of the session. The negativity intensified in the final hour, with blue-chip proxies leading the downward thrust. Still, the

Nasdaq Composite Index

managed to edge further beyond 5000.

The Nasdaq rose 1.78 to 5048.64, good enough for its 16th record of 2000 but well below its intraday high of 5132.52, hit around 10:45 a.m. EST.

Blue-chip averages were whipsawed by renewed weakness in consumer giants and strength in financial services companies. The

Morgan Stanley Consumer Index

fell 1.6% while the

American Stock Exchange Broker/Dealer Index

rose 3.6%.

Dial

(DL) - Get Report

fell 22.8% after issuing a

profit warning and

Clorox

(CLX) - Get Report

lost 11.7% after a

J.P. Morgan

downgrade.

Those developments refocused unwanted attention on

Procter & Gamble

(PG) - Get Report

, which was hit today by a shareholder lawsuit in the wake of

Tuesday's red flag. P&G fell 6.1%, helping drag the

Dow Jones Industrial Average

back into four-digit territory.

The Dow fell 81.91, or 0.8%, to 9928.82 after trading as high as 10,091.39.

Hewlett-Packard

(HWP)

was the Dow's biggest negative influence, returning 3.3% of Thursday's big advance.

American Express

(AXP) - Get Report

was the Dow's best performer, rising 3.2%.

Brokerage stocks such as

Goldman Sachs

(GS) - Get Report

,

Charles Schwab

(SCH)

and

Merrill Lynch

(MER)

were in big demand amid speculation a major financial institution was on the acquisition prowl.

Such rumors have been floated repeatedly and most market players dismissed them if only because it's Friday, always a big day for scuttlebutt.

Still, the talk took on added emphasis today in the wake of

Deutsche Bank's

(DTBKY)

acquisition of

Dresdner Bank

(DRSDY)

.

Chase

(CMB)

, long rumored to be eyeing a big broker, fell 3% and declined to comment after the

New York Stock Exchange

inquired about "unusual market activity" in its stock.

The Nasdaq's miniscule rise was led by chip names such as

Rambus

(RMBS) - Get Report

, which rose 10.6% after setting a 4-for-1 stock split. The

Philadelphia Stock Exchange Semiconductor Index

was up 3.3%.

Motorola

(MOT)

jumped 5.2% in Big Board action after

Salomon Smith Barney

reiterated its 200 price target for the stock.

The Comp was restrained by weakness in bellwethers such as

Sun Microsystems

(SUNW) - Get Report

and

Cisco

(CSCO) - Get Report

as well as Internet stalwarts such as

CMGI

(CMGI)

.

TheStreet.com Internet Sector

index fell 12,91, or 1%, to 1320.31 after climbing as high as 1350.16.

Meanwhile,

Microsoft

(MSFT) - Get Report

rose 1.1% after unveiling its "X-Box" videogame console, designed to compete with

Sony's

(SNE) - Get Report

Playstation. Sony fell 5.9%.

Nvidia

(NVDA) - Get Report

, whose graphics technology is employed in X-Box, rose 18.4%. But Microsoft's use of

Intel

(INTC) - Get Report

chips for X-Box helped send

Advanced Micro Devices

(AMD) - Get Report

down 3.9%.

Separately,

SRS Labs

(SRSL)

climbed 59.5% after announcing Microsoft had bought a stake in the company.

The other big story of the day involved

Qwest Communications

(Q)

, down 11.9%, and

U S West

(USW)

, which lost 8%. Qwest said a major suitor, widely reported to be

Deutsche Telekom

(DT) - Get Report

, had pulled out of merger talks. Separately, the

Federal Communications Commission

approved the pending Qwest-U S West merger.

Also,

Crayfish

(CRFH)

dumped 35.2% after its debut in Tokyo met with less demand than did its U.S. IPO on Wednesday.

Similarly, recent biotech favorite

Medarex

(MEDX)

fell 15.1% after announcing plans to jointly develop drugs with

Regeneron Pharmaceuticals

(REGN) - Get Report

, which slid 3.5%.

Same Old, Same Old

Among broader market averages, the

Russell 2000

fell 2.23, or 0.4% to 603.82 while the

S&P 500

shed 6.62, or 0.5%, to 1395.07.

"It's kind of a pattern, Friday's haven't been too good," said Jim Benning, a trader at

BT Brokerage

. "A lot of daytraders jump in when it looks like the market is strong in the morning, but they don't want to carry anything over the weekend. There's an awful lot of that kind of speculation leading to these Friday selloffs."

But "you can't make too much of a big deal out of the Dow down 80," the trader said.

Meanwhile, market players agree the focus remains squarely on over-the-counter stocks at the expense of blue-chips.

Bryan Piskorowski

, market analyst at

Prudential Securities

, noted

TrimTabs.com

reported that of the $16 billion of inflows into U.S. equity funds for the week ended March 6, $13 billion went into aggressive growth funds.

"That overwhelming allocation is why Nasdaq pullbacks are short and sweet and the value camp is suffering," Piskorowski said. "It exacerbates the dichotomy. In one of best value markets in last 5 years,

value fund managers are being forced to sell positions they'd normally love to hold to meet redemptions. That's the underlying reason why" blue-chips continue to lag.

In

New York Stock Exchange

trading, 1.1 billion shares were exchanged while declining stocks led advancers 1,712 to 1,214. In

Nasdaq Stock Market

action 1.95 billion shares traded while losers led 2,315 to 1,950. New 52-week lows bested new highs 144 to 69 on the Big Board while new highs led new lows 353 to 122 in over-the-counter trading.

Among other indices, the

Dow Jones Transportation Average

rose 23.85, or 1%, to 2365.29; the

Dow Jones Utility Average

added 2.05, or 0.7%, to 277.74; and the

American Stock Exchange Composite Index

climbed 14.57, or 1.4%, to 1033.33.

For the week, the Dow fell 4.2%; the S&P 500 lost 1%; the Nasdaq Comp gained 2.7%; the Russell 2000 advanced 1%; the DOT jumped 8.1%; the Dow transportation average slid 2.8%; the Dow utility average fell 4.3%; and the Amex composite added 1.9%.

The price of the 10-year Treasury note slid 8/32 to 100 26/32, it yield rising to 6.39%.

Market data above are preliminary. For coverage of today's top stocks in the news, see the Company Report, published separately

.