More ugliness in the bond market in light of strong economic data today sent the benchmark 30-year Treasury bond down sharply, as stocks slumped, led on the down side by the

S&P 500

.

The 30-year bond was up 1 12/32 to 93 26/32, yielding 5.682x%. Highlighting economic news, the

National Association of Purchasing Management

said its

Purchasing Managers Index

jumped to 52.4 in February, stronger than the 50 reading projected by economists according to a

Reuters

poll, as economic activity in the manufacturing sector jumped following eight months of decline. In January, the index came in at 49.5. A reading above 50 indicates that the manufacturing economy is generally expanding, while a reading below 50 indicates that it is generally contracting.

The

Dow Jones Industrial Average

was down 38 to 9269. The

S&P 500

was down 11 to 1227. The

Nasdaq Composite Index

was down 19 to 2269. The

Russell 2000

was down 1 to 392.

TheStreet.com Internet Sector

was down 5 to 506.

TheStreet.com E-Commerce Index

was down 2 to 95.

Among the bits of news in the tech sector was

Donaldson Lufkin & Jenrette's

downgrade of chip giant

Intel

(INTC) - Get Report

. Intel was down 4 3/4 to 115 5/16 and was most active on the

Nasdaq Stock Market

on volume of 15 million.

On the

New York Stock Exchange

, decliners were beating advancers 1,592 to 1,083 on 2882 million shares. On the Nasdaq losers were beating winners 1,998 to 1,379 on 311 million shares.

On the NYSE, 61 issues had set new 52-week lows while 7 had touched new highs. On the Nasdaq, 42 issues had set new lows while new highs totaled 29.

On the Big Board,

Compaq

(CPQ)

was most active with 20 million shares changing hands. It was down 2 1/16, or 6%, to 33 5/16. Compaq said it was cutting prices up to 11% on some of its computer products.

ING Baring Furman Selz

cut its revenue and earnings estimates and reiterated its buy rating on Compaq.

Meanwhile, on the merger and acquisition front, Britain's

General Electric

is buying

Reltec

(RLT)

for a total of $2.1 billion in cash, or $29.50 per Reltec share, and the assumption of $361 million in debt. Reltec was soaring 7 3/8, or 34%, to 29 1/8.

Tech Focus

DLJ, in a research note today accompanying its downgrade of the chip titan Intel, said that "recent evidence has shown that PC market growth in the March quarter is not as robust as earlier indications have suggested. Particularly troubling is the lack of strength in the corporate PC market, which was anticipated to strengthen due to Y2K-related pull-ins.

"After surpassing expectations in the previous 2 quarters, we believe Intel will be challenged to meet consensus expectations in the current quarter and for the year," the research note said. Although the firm sees Intel as an attractive stock for long-term investors, "the change in business tone for the PC industry has significantly increased the near-term risk in the stock." DLJ believes Intel has downside risk to below $100 over the next three to six months. The firm lowered its 12-month price target on Intel to $160 from $175.

Among some of the tech gauges, the

Philadelphia Stock Exchange Semiconductor Index

was down fractionally. Elsewhere, the

Morgan Stanley High-Tech 35

was down 1%, while the

Nasdaq 100

was down 1%. The

Philadelphia Stock Exchange Computer Box Maker Index

was down 2%.

Semiconductor equipment makers, meanwhile, were the subject of a report out of

Salomon Smith Barney

. Four companies were downgraded:

Asyst Technologies

(ASYT)

was cut to neutral from buy;

ATMI

(ATMI)

, and

Silicon Valley Group

(SVGI)

were cut to neutral from outperform and

Credence Systems

(CMOS)

was sliced to outperform from buy.

Salomon said it was sticking with its top three semiconductor equipment stocks:

Applied Materials

(AMAT) - Get Report

,

KLA-Tencor

(KLAC) - Get Report

and

Electro Scientific Industries

(ESIO) - Get Report

.

Meanwhile, the biggest loser on the Nasdaq was

eBay

(EBAY) - Get Report

, which said on Friday that on Jan. 29, the company received requests to produce certain records and information to the federal government relating to an investigation of possible illegal transactions in connection with eBay's Web site. eBay said it is fully cooperating with the inquiry. The online auctioneer was down 15 1/8, or 5%, to 319 1/4.

11:00 a.m.: Decline in Stocks Picks Up Steam

More evidence (as if any more was needed) of economic strength in the U.S. sent the bond market tumbling, as stocks slumped, with the heaviest percentage loss suffered so far by the

S&P 500

.

The 30-year Treasury bond was down 1 9/32 to 93 29/32, yielding 5.68%.

The

National Association of Purchasing Management

said its

Purchasing Managers Index

jumped to 52.4 in February, stronger than the 50 reading projected by economists according to a

Reuters

poll, as economic activity in the manufacturing sector jumped following eight months of decline. In January, the index came in at 49.5. A reading above 50 indicates that the manufacturing economy is generally expanding, while a reading below 50 indicates that it is generally contracting.

The S&P 500 was down 16 to 1223.

The

Dow Jones Industrial Average

was down 71 to 9235. The

Russell 2000

was down 1 to 391.

TheStreet.com Internet Sector

was down 6 to 505.

TheStreet.com E-Commerce Index

was down 2 to 95.

The

Nasdaq Composite Index

was down 20 to 2268. Chip titan

Intel

(INTC) - Get Report

was down 4 9/16 to 115 7/16 after a downgrade from

Donaldson Lufkin & Jenrette

, which cut its rating on Intel to market perform from buy. Intel was most active on the

Nasdaq Stock Market

with 11 million shares traded.

Brokerage stocks gained on positive comments on the industry coming out of DLJ. However, some of the sector's gains have eroded. DLJ also upgraded

Lehman Brothers

(LEH)

to buy from market perform.

Speaking of Lehman, the firm's chief investment strategist, Jeffrey Applegate, boosted his S&P 500 index target to 1350 from 1325. He also raised his earnings per share estimate for the S&P 500 to $47.50 from $47.

On the

New York Stock Exchange

, decliners were beating advancers 1,489 to 1,005 on 194 million shares. On the Nasdaq, losers were beating winners 1,809 to 1,315 on 218 million shares.

On the NYSE, 45 issues had set new 52-week lows while 6 had touched new highs. On the Nasdaq, 28 issues had set new lows while new highs totaled 25.

Elsewhere on the economic front, construction spending rose 1.6% in January, up from a revised reading of 1.4% in December, the

Commerce Department

reported. The data was much stronger than the 0.4% gain economists expected.

On the Big Board,

Compaq

(CPQ)

was most active with 16 million shares changing hands. It was down 2 1/8, or 6%, to 33 1/4, continuing its recent decline.

Online trading at

Charles Schwab

(SCH)

was down Monday morning for the second time is less than a week. Customers were unable to trade through the Web from about 10 a.m. EST to about 10:20, according to a Schwab spokeswoman. The No. 1 online broker by online transactions also suffered an hour-long breach in Web trading

last Wednesday. While Schwab is still investigating the source of the problem, a spokeswoman says it could be related to the system enhancements Schwab is making. The Wednesday outage was related to the installation of a new mainframe computer. In the industry, it is not uncommon for

glitches to affect brokers as they try to make changes to their systems on the fly. Schwab was down 2 1/2 to 72 1/16.

--

Amy Olmstead

9:56 a.m.: Stocks Mostly Lower as Treasuries Tumble

Stocks were mostly lower early on as bonds tumbled after rallying

Friday.

Meanwhile,

Donaldson Lufkin & Jenrette

downgraded chip titan

Intel

(INTC) - Get Report

to market perform from buy.

The

Dow Jones Industrial Average

was up 7 to 9313. The

S&P 500

was down 4 to 1235.

The

Nasdaq Composite Index

was down 10 to 2279. The

Russell 2000

was up fractionally at 393.

TheStreet.com Internet Sector

was down 2 to 508.

TheStreet.com E-Commerce Index

was down fractionally at 97.

The 30-year Treasury bond was down 26/32 to 94 15/32, yielding 5.65%.

On the economic front, the

National Association of Purchasing Management

will release its

Purchasing Managers Index

at 10 a.m. EST.

Most Up at Open -- NYSE

Hertz (HRZ) , up 1 15/16 to 41 3/4

.

Most Up at Open -- Nasdaq

North Face (TNFI) , up 3 1/8 to 16

: The company said its board of directors approved an agreement covering a recapitalization, resulting in CEO James Fifield and

Leonard Green & Partners

acquiring North Face for $17 cash per share.

Most Down at Open -- NYSE

STMicroelectronics (STM) - Get Report, down 3 3/8 to 84

.

Most Down at Open -- Nasdaq

eBay (EBAY) - Get Report, down 7 1/4 to 326 3/4

: The government Jan. 29 asked the online auctioneer for information relating to an investigation of possible illegal transactions in connection with eBay's Web site. eBay said it is fully cooperating with the inquiry.