Plop, Plop, Fizzle: Market Struggles to Digest Yesterday's Gains

Net stocks are soaring on, but the broader market is lower after bouncing around the flat line all morning.
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The

Nasdaq Composite Index

held out for a good while, but it's lately joined its record-setting compatriots from

yesterday's rally in slumping.

The Comp was down 1 to 2559, and that wasn't the only trouble for the tech-splashed measure. Decliners were beating advancers on the

Nasdaq Stock Market

, and more new lows were being made than new highs.

Yesterday, of course, boasted a trifecta of indices closing at record highs: the

Dow Jones Industrial Average

, the

S&P 500

and the Nasdaq Comp.

The Dow lately was down 31, or 0.3%, to 9976. The biggest drag on the venerable blue-chip average was financial services behemoth

American Express

(AXP) - Get Report

, which fell 2 7/16 to 123.

"Every time it gets near 10,000, it gets a nosebleed," said Peter Boockvar, equity strategist at

Miller Tabak Hirsch

.

Meanwhile, reports of a unilateral cease-fire from Yugoslavia -- followed shortly after by a rebuffing of it from

NATO

-- prompted little reaction in the market.

The S&P 500 was down 3, or 0.2%, to 1318.

Among the tech bellwethers,

Cisco

(CSCO) - Get Report

,

Intel

(INTC) - Get Report

and

Dell

(DELL) - Get Report

were higher. Dell was most active on the Nasdaq, with 22.2 million shares changing hands. It was up 1 1/8 to 45 1/8.

Microsoft

(MSFT) - Get Report

, meanwhile, was down 1 1/16 to 93 15/16.

More-specific tech sector gauges were higher. The

Philadelphia Stock Exchange Semiconductor Index

rose 1.7%, while the

Nasdaq 100

gained a fraction. Meanwhile, the

Morgan Stanley High-Tech 35

added 0.8%.

The cyberspace arena was mixed.

TheStreet.com Internet Sector

index was up solidly again today, up 22, or 3.2%, to 705, led by

RealNetworks

(RNWK) - Get Report

, which was up 29, or 18.8%, to 183 1/8.

Meanwhile,

TheStreet.com E-Commerce Index

slumped 1, or 0.8%, to 122.

The small-cap

Russell 2000

-- which lagged the other indices in yesterday's advance and is well below its all-time highs -- was down half a point to 402. The Russell's all-time closing high is 491.41.

As for the weakness today, some of the blame was laid on the need for the market to take a break after yesterday's rally, and on

Gillette's

(G) - Get Report

earnings warning. That warning sent shares of Gillette down 11.8%.

Elsewhere in the news,

The Wall Street Journal

reported that

MCI WorldCom

(WCOM)

is holding preliminary talks about buying

Nextel Communications

(NXTL)

. The stocks themselves, however, weren't moving that much.

Peter Coolidge, managing director of trading at

Brean Murray Foster Securities

, said the market is suffering some indigestion from yesterday's rally.

Unlike yesterday's rally -- which was inspired in part by Friday's jobs report -- Coolidge said the market didn't have an impetus to keep going up today.

Currently, Boockvar said he's somewhat cautious on the market because the market's so narrow. The more narrow it gets, the more frothy it gets, he noted.

He said the market still needs to correct itself. He said he'd feel more comfortable with the market if some of the excess of it was shaken out particularly in some of the bigger-cap stocks.

"We'd like to see more participation," Boockvar said.

Boockvar was less-than-impressed with yesterday's rally, pointing to the light volume and the weak breadth that accompanied it.

As for the Treasury market, the 30-year Treasury bond was lately up 28/32 to 95 31/32, yielding 5.53%. (For more on the fixed-income market, see today's early

Bond Focus.)

On the

New York Stock Exchange

, decliners were beating advancers 1,639 to 1,171 on 433 million shares. On the Nasdaq, losers were beating winners 2,205 to 1,489 on 634 million shares.

On the NYSE, 66 issues had set new 52-week lows while 58 had touched new highs. On the Nasdaq, 115 issues had set new lows while new highs totaled 99.

Among other indices, the

Dow Jones Transportation Average

was down 0.1%, the

Dow Jones Utility Average

was down 0.6% and the

American Stock Exchange Composite Index

was off 0.5%.

On the Big Board,

America Online

(AOL)

was most active, with 22.1 million shares changing hands. It was up 2 1/16 to 169.

Tuesday's Midday Movers

By Heather Moore
Staff Reporter

Gillette was falling 6 7/8, or 11.8%, to 50 15/16 after last night warning it expects to post a mid-single-digit percentage increase in first-quarter earnings, leaving results about a penny below the 16-analyst outlook for 25 cents a share. The company, which earned 23 cents in the year-earlier period, said greater-than-anticipated softness in the

Braun

business and in Latin America will hurt results. Today,

Morgan Stanley Dean Witter

downgraded the stock to neutral from outperform,

Donaldson Lufkin & Jenrette

lowered it to market perform from top pick and

Brown Brothers Harriman

dropped it to short-term neutral from buy.

In other news:

Allied Holdings

(AHI)

was down 3, or 32%, to 6 3/8 after

BT Alex. Brown

lowered it to market perform from buy.

E*Trade

(EGRP)

was up 3 3/8 to 76 1/8, continuing yesterday's push skyward fueled by news of strong online trading volume. Today, the company said

Reuters

(RTRSY)

will be its primary provider of financial news and market data. Reuters was up 1 7/8 to 90 5/8.

Lernout & Hauspie Speech

(LHSP)

was up 5, or 13.2%, to 43 on last night's news that Intel agreed to invest $30 million in the company. Intel was up 2 1/4 to 129 11/16.

National Propane

(NPL)

was up 4 3/8, or 64.2%, to 11 3/16 after last night

Columbia Energy

(CG) - Get Report

said it will buy the company for $12 a share. Columbia Energy was flat at 53 3/8.

Pediatrix Medical Group

(PDX)

was down 3, or 17.5%, to 14 1/8 after

U.S. Bancorp Piper Jaffray

dropped the stock to neutral from strong buy. Yesterday, Pediatrix said Arizona and Colorado government officials are seeking billing-related documents from the company.

TCI Music

(TUNE)

was soaring 12 3/16, or 147.7%, to 20 7/16 on news

AT&T's

(T) - Get Report

Liberty Media

(LMGA)

offered to sell its Internet and interactive television assets in exchange for TCI Music stock. Liberty Media was up 2 5/16 to 58 3/16; and Telephone was up 1 5/16 to 78 11/16.

Separately,

News Corp.

(NWS) - Get Report

announced it's buying Liberty Media's 50% stake in

Fox/Liberty Networks

in exchange for 51.8 million nonvoting News Corp. ADRs. News Corp., up 1/8 to 33 15/16, said it also plans to repurchase 56.2 million of its nonvoting ADRs from MCI WorldCom for $1.4 billion. MCI WorldCom was off 3 1/8 to 89 3/8.

Yahoo!

(YHOO)

was up 8 3/16 to 227 1/4 on word it will be featured on the default Web page on PCs sold by

Micron Electronics

(MUEI)

. Micron was up 5/16 to 11 11/16.

Earnings/revenue movers

Genesee & Wyoming

(GNWR)

was down 2 1/8, or 19.5%, to 9 after saying it expects to report a first-quarter loss of about 7 cents a share due to lower Australian grain movements and northeastern U.S. car loadings. The single-analyst view called for quarter earnings of 40 cents a share vs. the year-ago profit of 42 cents.

Starbucks

(SBUX) - Get Report

was up 1 15/16, or 6.3%, to 32 3/4 after last night saying its March same-store sales rose 6%.