Session Turns Sharply Negative, Sending Indices Tumbling

The once-strong Nasdaq slides to a downside finish, with only the TSC Internet index managing to rise.
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Stocks tumbled overall, while online auctioneer

eBay

(EBAY) - Get Report

leapt 38% to lead Internet Stocks. But the famously volatile sector ended the session well off its intraday highs.

eBay soared 83 1/2 to 303 1/2.

Yesterday the company posted earnings that beat analysts' expectations and set a 3-for-1 stock split. Today,

Donaldson Lufkin & Jenrette

upgraded the stock to buy from market perform. It bumped its price target on the stock to 360 from 100.

The

Dow Jones Industrial Average

slumped 124.35, or 1.3%, to 9200.23.

IBM

(IBM) - Get Report

was the biggest drag on the Dow. Big Blue fell 7 5/16 to 178 5/16.

TheStreet.com Internet Sector

index gained 14.51, or 2.8%, to 534.60. At its top, the index had gained about 6%.

The

Nasdaq Composite Index

drooped 26.23, or 1.1%, to 2407.18.

The

S&P 500

fell 9.12, or 0.7%, to 1243.19. The

Russell 2000

dropped 4.21, or 1%, to 421.12.

The 30-year Treasury bond was lately down 2/32 to 101 23/32, yielding 5.14%.

America Online

(AOL)

just reported second-quarter earnings of 17 cents a share, beating the 31-analyst

First Call

estimate by 3 cents. The company also set a 2-for-1 stock split.

On the

New York Stock Exchange

, decliners beat advancers 1,942 to 1,055 on 894 million shares. On the

Nasdaq Stock Market

losers beat winners 2,499 to 1,599 on 1.035 billion shares.

On the NYSE, 73 issues set new 52-week lows while 51 touched new highs. On the Nasdaq, 109 issues set new highs while new lows totaled 39.

On the Big Board,

Compaq

(CPQ)

was most active, with 38.2 million shares changing hands. It was down 2 3/16 to 47 1/16. Compaq posted fourth-quarter earnings of 43 cents a share, easily beating the

First Call

32-analyst view of 37 cents and the year-ago 42 cents. Compaq said fourth-quarter sales rose 48% to $10.9 billion. Earlier, the stock hit a 52-week intraday high, peaking at 51 1/4.

On the Nasdaq,

Microsoft

(MSFT) - Get Report

was most active, with 24.2 million shares changing hands. It was down 2 7/8 to 168 5/8. It hit a 52-week intraday high when it peaked at 174 7/16.

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

.

2:49 p.m.: No Sign of Flagging in Net Sector as Dow Weakens

Internet stocks continued to soar, with

TheStreet.com Internet Sector

index lately up 5.8%, while the rest of the market was mixed.

Among the major market averages, the

Nasdaq Composite Index

was again the outperformer, up 13 to 2447.

The

Dow Jones Industrial Average

was down 53 to 9272. The

S&P 500

was up 1 to 1254. The

Russell 2000

was down 2 to 424.

Meanwhile in the Treasury market, the 30-year bond was lately down 4/32 to 101 21/32, yielding 5.14%.

Looking ahead, market participants will be keeping an eye on the impeachment trial against

President Clinton

in Washington, said Louis Todd, head of equities trading at

J.C. Bradford

. He added, however, that he didn't think anyone expects Clinton to get kicked out of office.

Also, market participants will be watching how much money comes into mutual funds and they'll be keeping an eye on the IPO calendar, which Todd said has a "pretty good backlog." He noted that some companies have gone on the road recently and "haven't been well received," as buyers are becoming much more selective.

Market internals were poor, as Todd pointed out that down volume was leading up volume on the

New York Stock Exchange

and the advance-decline line was also tilted to the negative side.

On the NYSE, decliners were beating advancers 1,789 to 1,154 on 694 million shares. On the

Nasdaq Stock Market

losers were beating winners 2,279 to 1,630 on 813 million shares.

On the NYSE, 65 issues had set new 52-week lows while 44 had touched new highs. On the Nasdaq, 101 issues had set new highs while new lows totaled 32.

On the Big Board,

Compaq

(CPQ)

was most active, with 32.3 million shares changing hands. It was down 1 3/8 to 47 7/8. Compaq posted fourth-quarter earnings of 43 cents a share, easily beating the

First Call

32-analyst view of 37 cents and the year-ago 42 cents. Compaq said fourth-quarter sales rose 48% to $10.9 billion. Earlier, the stock hit a 52-week intraday high, peaking at 51 1/4.

On the Nasdaq,

Microsoft

(MSFT) - Get Report

was most active, with 18.7 million shares changing hands. It was up 1 to 172 1/2. It also hit a 52-week intraday high when it peaked at 174 7/16.

2:11 p.m.: Stocks Stay Mixed, but Net Sector Maintains Its Ascent

Stocks were mixed this afternoon as Internet stocks continued to put on an impressive performance, while in Washington, the

Senate

recently rejected a motion to dismiss impeachment charges against

President Clinton

.

TheStreet.com Internet Sector

index was up 28 to 548.

eBay

(EBAY) - Get Report

, which is not an index stock, was the biggest Nasdaq stock gainer in value. It was lately up 84 5/8, 38.5%, to 304 5/8.

Yesterday the online auctioneer posted earnings that beat analysts' expectations and set a 3-for-1 stock split. Today,

Donaldson Lufkin & Jenrette

upgraded the stock to buy from market perform. It bumped up its price target on the stock to 360 from 100.

In addition,

BancBoston Robertson Stephens

analysts Keith E. Benjamin and Lauren Cooks Levitan maintained their buy rating on eBay and raised their 1999 estimate for the company to 22 cents a share from 15 cents and their 2000 estimate to 55 cents from 42 cents. The analysts said they believe eBay's latest results highlight its "dramatic growth potential and extraordinarily profitable business model among many profitless Internet peers."

The

Dow Jones Industrial Average

was down 43 to 9282.

The

S&P 500

was up 2 to 1254. Among the S&P 500's industry groups, health care was the best performing while financials and energy have lately been the biggest losing sectors.

The tech-soaked

Nasdaq Composite Index

was up 14 to 2447. The

Russell 2000

was down 2 to 424.

The 30-year Treasury bond was lately down 8/32 to 101 17/32, yielding 5.15%.

On the

New York Stock Exchange

, decliners were beating advancers 1,725 to 1,145 on 575 million shares. On the

Nasdaq Stock Market

losers were beating winners 2,186 to 1,603 on 689 million shares.

On the NYSE, 59 issues had set new 52-week lows, while 40 had touched new highs. On the Nasdaq, 94 issues had set new highs, while new lows totaled 28.

On the Big Board,

Compaq

(CPQ)

was most active, with 28.4 million shares changing hands. It was down 9/16 to 48 11/16. Compaq

posted fourth-quarter earnings of 43 cents a share, easily beating the

First Call

32-analyst view of 37 cents and the year-ago 42 cents. Compaq said fourth-quarter sales rose 48% to $10.9 billion. Earlier, the stock hit a 52-week intraday high, peaking at 51 1/4.

On the Nasdaq,

Microsoft

(MSFT) - Get Report

was most active, with 15.9 million shares changing hands. It was up 2 to 173 9/16. It also hit a 52-week intraday high when it peaked at 174 7/16.

Sector Focus: Booksellers

Borders Group

(BGP)

swooned on a profit warning today.

Borders was down 3 1/8, or 15.4%, to 17 1/8, after the company said its fourth-quarter and full-year earnings would fall below the First Call 13-analyst view of $1.09 and $1.16 a share, respectively. On Jan. 7, the company warned its fourth-quarter results would not meet forecasts, then at $1.22 a share. Borders hit a 52-week intraday low today when it cratered at 17.

Barnes & Noble

(BKS) - Get Report

fell 1 to 39 1/8.

Books-A-Million

, probably best known for its Internet bookselling rather than its brick-and-mortar operations, was up 3/8 to 11 3/16.

1:03 p.m.: Midday Musings: Focus Remains Riveted on Net Stocks in Muddy Session

11:55 a.m.: Broad Market's Modest Slide Extends

Internet stocks remained the market's bright spot but are well off their session highs while the rest of the market's major indices -- after opening on the plus side -- are now all in the red.

TheStreet.com Internet Sector

index was up 23 to 543. The biggest gainer in the index is

Amazon.com

(AMZN) - Get Report

, lately up 16 3/8, or 14.2%, to 131 3/8. The Net merchant beat analysts' expectations when it reported earnings

yesterday.

eBay

(EBAY) - Get Report

, which is not an index stock, was the biggest Nasdaq stock gainer in value. It was lately up 78 1/2, or 35.7%, to 298 1/2.

Yesterday the online auctioneer posted earnings that beat analysts' expectations and set a 3-for-1 stock split. Today,

Donaldson Lufkin & Jenrette

upgraded the stock to buy from market perform. It bumped its price target on the stock to 360 from 100.

The

Dow Jones Industrial Average

was down 41 to 9284.

IBM

(IBM) - Get Report

was the biggest drag on the Dow and lately was down 3 11/16 to 181 15/16.

Elsewhere, the

S&P 500

was down 2 to 1250. The tech-heavy

Nasdaq Composite Index

was down 1 to 2432. The

Russell 2000

was down 2 to 423.

The 30-year Treasury bond was down 3/32 to 101 22/32, yielding 5.14%. (For more on the fixed-income market, see today's early

Bond Focus.)

Among the sectors,

Philadelphia Stock Exchange/KBW Bank Index

was down 1.8%.

First Union

, an index component, was down 5 11/16, or 10%, to 51 3/8 after yesterday saying it is making some accounting changes that will trim 1999 earnings. In addition, several brokerage firms downgraded the stock today.

Conversely, brokerage stocks were higher. The

American Stock Exchange Broker/Dealer Index

was lately up 1.4%.

On the

New York Stock Exchange

, decliners were beating advancers 1,667 to 1,048 on 400 million shares. On the

Nasdaq Stock Market

losers were beating winners 2,088 to 1,474 on 493 million shares.

On the NYSE, 46 issues had set new 52-week lows while 33 had touched new highs. On the Nasdaq, 82 issues had set new highs while new lows totaled 25.

On the Big Board,

Compaq

(CPQ)

was most active, with 22.8 million shares changing hands. It was down 7/8 to 48 3/8. More on Compaq below.

On the Nasdaq,

Imaging Technologies

(ITEC)

was most active on volume of 12.6 million shares. It was unchanged at 4. Yesterday the company announced the launch of an e-commerce Web site, news which pushed its stock up roughly 228%.

Tech Focus

The tech sector, after making solid gains this week and in early action this morning, has slumped.

Among the major tech indices, the

Philadelphia Stock Exchange Computer Box Maker Index

was down 1.2%, the

Morgan Stanley High-Tech 35

was up a fraction, the

Nasdaq 100

was down 0.2% and the

Philadelphia Stock Exchange Semiconductor Index

was down 2.3%.

In earnings news, Compaq posted fourth-quarter earnings of 43 cents a share, easily beating the

First Call

32-analyst view of 37 cents and the year-ago 42 cents. Compaq said fourth-quarter sales rose 48% to $10.9 billion. Earlier, the stock hit a 52-week intraday high, peaking at 51 1/4 before easing off that level.

Meanwhile, after the close

America Online

(AOL)

will report earnings.

TheStreet.com

wrote a preview story on AOL's earnings report

this morning. AOL was up 6 9/16 to 161 9/16.

10:52 a.m.: Stocks Retreat from Best Levels

After jumping sharply early on, the major stock market averages ran into hard resistance and were close to break-even, while Internet stocks continued to soar.

TheStreet.com Internet Sector

index was up 16 to 536.

eBay

(EBAY) - Get Report

, which isn't an index component, was leading the Net sector sharply higher.

Yesterday the company posted earnings that beat Wall Street's expectations and set a 3-for-1 stock split. Today,

Donaldson Lufkin & Jenrette

upgraded the stock to buy from market perform. It bumped its price target on the stock to 360 from 100.

The

Dow Jones Industrial Average

was up 8 to 9333.

The

S&P 500

was up a fraction to 1252. The

Nasdaq Composite Index

was down a fraction to 2433. The small-cap

Russell 2000

was down 1 to 424.

Drug stocks gained, but are off their best levels of the session. The

American Stock Exchange Pharmaceutical Index

was up 0.9%.

Warner-Lambert

(WLA)

and

Agouron Pharmaceuticals

(AGPH)

gained handsomely. Warner-Lambert yesterday said it was buying Agouron for $2.1 billion in stock. Warner-Lambert was up 3 1/4 to 72 3/8, while Agouron surged 6 1/16, or 11.4%, to 59 1/16.

This morning

TheStreet.com

wrote about the deal.

The 30-year Treasury bond fell. It lately was down 8/32 to 101 17/32, yielding 5.15%.

After two strong days in the stock market and after a stronger opening, stocks were off from their best levels of the day due to profit-taking, said Peter Coolidge, managing director of equity trading at

Brean Murray Foster Securities

.

The words "stock split" have in part sparked the market's rise this week, and earnings news remains a focus for the market.

International events were also on the minds of traders and investors. Coolidge said there are still worries about Brazil and what the currency events down there mean to companies here, and market participants are keeping a cautious eye on the South American country.

First Union

was getting crushed this morning after yesterday saying it is making some accounting changes that will trim 1999 earnings. In response, several brokerages downgraded the stock today. It was down 5 13/16, or 10.2%, to 51 1/4.

On the

New York Stock Exchange

, decliners were beating advancers 1,482 to 1,069 on 263 million shares. On the

Nasdaq Stock Market

, losers were beating winners 1,792 to 1,411 on 345 million shares.

On the NYSE, 33 issues had set new 52-week lows while 30 had touched new highs. On the Nasdaq, 75 issues had set new highs while new lows totaled 14.

On the Big Board,

Compaq

(CPQ)

was most active, with 16.3 million shares changing hands. It was down 3/4 to 48 1/2. Compaq posted fourth-quarter earnings of 43 cents a share, easily beating the 32-analyst First Call view of 37 cents and the year-ago 42 cents. Compaq said fourth-quarter sales rose 48% to $10.9 billion.

On the Nasdaq,

Imaging Technologies

(ITEC)

was most active on volume of 10.6 million shares. It was down 7/32, or 5.5%, to 3 25/32. Yesterday the company announced the launch of an e-commerce Web site, news that pushed its stock up roughly 228%.

9:53 a.m.: Internet Stocks Lead an Opening Surge

Internet stocks led by

eBay

(EBAY) - Get Report

have surged early on as the market's major gauges opened higher, paced by the tech-heavy

Nasdaq Composite Index

.

eBay was lately up 72, or 32.7%, to 292. More info on what's driving eBay below.

TheStreet.com Internet Sector

index was up 29 to 549.

The Nasdaq Comp was up 30 to 2463. The

Dow Jones Industrial Average

was up 47 to 9371. The

S&P 500

was up 9 to 1262. The

Russell 2000

was up 2 to 427.

The 30-year Treasury bond was down 8/32 to 101 17/32, yielding 5.15%.

On the earnings front lately,

DuPont

(DD) - Get Report

posted earnings from continuing operations of 60 cents a share, beating the

First Call

14-analyst estimate of 58 cents, but down from the year-ago 65 cents. DuPont was up 15/16 to 54 13/16.

Conoco

(COC)

posted fourth-quarter operating earnings of 5 cents a share, in line with the six-analyst First Call estimate. Conoco was down 1/4 to 19 7/8.

Most Up at Open -- NYSE

America Online (AOL) , up 5 to 158 1/2

: AOL will post second-quarter earnings after the close today. The First Call 31-analyst view sees the company earning 14 cents a share.

Most Up at Open -- Nasdaq

eBay (EBAY) - Get Report, up 84 1/8 to 305

: The company yesterday posted fourth-quarter earnings of 7 cents a share, 3 cents ahead of the First Call nine-analyst outlook and up from the year-ago 1 cent. The online auctioneer also set a 3-for-1 stock split. Today,

Donaldson Lufkin & Jenrette

upgraded the stock to buy from market perform. It bumped its price target on the stock to $360 a share from $100 a share.

Most Down at Open -- NYSE

BP Amoco (BPA) , down 1 9/16 to 83 3/4

.

Most Down at Open -- Nasdaq

DSP Group (DSPG) - Get Report, down 5 1/4 to 15 1/2

: The company yesterday said it expects first-quarter revenues and earnings to drop from fourth-quarter levels before improving again in the second quarter.