Publish date:

Stocks Close Modestly Higher Ahead of CPI Data, Greenspan Testimony

In a late slide, bonds erased their gains.

Major market averages ended higher -- but off their best levels of the session -- ahead of tomorrow's eagerly awaited May

Consumer Price Index

report and Thursday's scheduled testimony by

Federal Reserve

Chairman

Alan Greenspan

.

The CPI report is slated for release at 8:30 a.m. EDT. The consensus estimate among economists surveyed by

Reuters

is for a 0.2% rise in both the overall and core measures. Meanwhile, on Thursday, Greenspan is slated to testify on monetary policy and the economy before the

Joint Economic Committee

of

Congress

.

TheStreet.com Internet Sector

index closed out a volatile session with a slight gain. It had fallen as low as the 495.17 level and risen as much as the 513.25 level.

In the world of blue-chips, the

Dow Jones Industrial Average

had risen as much as 118.73 to 10,682.06 during the session.

Meanwhile, the 30-year Treasury bond was unable to put two back-to-back winning sessions together and late in the day it slipped into negative territory ahead of tomorrow's consumer price data and Thursday's Greenspan testimony. The slight slump in the long bond, which had been modestly firmer throughout the day, was blamed in part with taking some of the luster out of stocks late in the afternoon.

On the

New York Stock Exchange

, advancers beat decliners 1,636 to 1,355 on 698 million shares. On the

Nasdaq Stock Market

, losers beat winners 2,128 to 1,789 on 826.6 million shares.

On the NYSE, 147 issues set new 52-week lows while 78 touched new highs. On the Nasdaq, 90 issues set new lows while new highs totaled 57.

On the Big Board,

America Online

(AOL)

was most active, with 29.8 million shares changing hands. It was up 3 3/4 to 94 1/4.

On the Nasdaq,

Oracle

(ORCL) - Get Oracle Corporation Report

was most active, with 26.6 million shares changing hands. It was down 1 3/8 to 25 1/8 ahead of the release of its fiscal fourth-quarter earnings report. After the close, the company reported fourth-quarter earnings of 36 cents a share, beating the

First Call

30-analyst consensus estimate of 32 cents.

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

2:59 p.m.: Major Indices Solidly Higher Ahead of CPI Data, Greenspan Testimony

Major market averages were cruising into the final hour of trading solidly higher ahead of tomorrow's much-anticipated (now there's an understatement) release of the

Consumer Price Index

, while

TheStreet.com Internet Sector

index recently slumped into the red.

Around 2:35 p.m. EDT, the index fell into negative territory, after spending most of the session above water.

Market participants continue to be focused on tomorrow's release of the CPI and

Federal Reserve

Chairman

Alan Greenspan's

slated testimony before the

Joint Economic Committee

on monetary policy and the economy.

Analysts for the most part expect the

Federal Open Market Committee

to raise interest rates when it meets later this month. The FOMC is slated to meet on June 29-30.

The bond market has built in at least one Fed tightening, but the uncertainty is in how many moves the Fed may make, noted Kim Rupert, senior economist at

Standard & Poor's MMS

.

Rupert said that if the CPI data is "far outside expectations," say up 0.4% on the core CPI, the bond market would likely start pricing in a more aggressive Fed action. She said she thinks the market would price in two successive 25-basis-point tightenings.

Following the June meeting, the next scheduled FOMC meeting is scheduled for Aug. 24.

Tech sector gauges were rallying after slumping yesterday. The

Nasdaq 100

was up 1%, the

Philadelphia Stock Exchange Semiconductor Index

was up 3%, while the

Morgan Stanley High-Tech 35

was up 1%.

The

Nasdaq Composite Index

was well off its intraday highs.

Financials gained. The

Philadelphia Stock Exchange/KBW Bank Index

and the

American Stock Exchange Broker/Dealer Index

were both up 1%.

The

Philadelphia Stock Exchange Forest & Paper Products Index

was up 2%.

Oil and oil service stocks jumped. The

Philadelphia Stock Exchange Oil Service Index

was up 3%. Meanwhile, the

Chicago Board Options Exchange Oil Index

was up 2%.

On the

New York Stock Exchange

, advancers were leading decliners 1,618 to 1,244 on 535 million shares. On the

Nasdaq Stock Market

, losers were beating winners 2,044 to 1,700 on 639 million shares.

On the NYSE, 125 issues had set new lows 52-week while 75 had touched new highs. On the Nasdaq, 74 issues had set new lows while new highs totaled 49.

On the Big Board,

America Online

(AOL)

was most active, with 25 million shares changing hands. It was up 3 1/4 to 93 3/4.

On the Nasdaq,

Oracle

(ORCL) - Get Oracle Corporation Report

was most active, with 22 million shares changing hands. It was down 1 1/8 to 25 5/16 ahead of the release of its fiscal fourth-quarter earnings report, due after the close. The

First Call

30-analyst consensus estimate sees the company earning 32 cents a share.

2:00 p.m.: Internet Sector Pushes Nasdaq Up

Recovering some of the ground they lost yesterday, Internet stocks were firmly higher as the

Nasdaq Composite Index

paced the major market averages in the green.

TheStreet.com Internet Sector

index was just off its session highs.

Among the biggest gainers on the

Nasdaq Stock Market

were Net stocks.

Yahoo!

(YHOO)

and

Lycos

(LCOS)

were both enjoying a solid session, up 7% and 11% respectively.

Stocks were higher thanks in part to a firm bond market. Volume in the stock market, however, was nothing special, reflecting apprehension in the market ahead of tomorrow's release of the May

Consumer Price Index

and

TheStreet Recommends

Federal Reserve

Chairman

Alan Greenspan's

slated testimony before the

Joint Economic Committee

on monetary policy and the economy.

Semiconductor company

Broadcom

undefined

was up 8 1/8, or 8%, to 109 3/16, and was the biggest gainer in terms of value on the Nasdaq.

Merrill Lynch

analyst Joe Osha raised his price targets on seven semiconductor companies today -- including Broadcom.

Financials firmed, snapping back a bit after yesterday's tumble and on continued firmness in the bond market. The

Philadelphia Stock Exchange/KBW Bank Index

was up 1%. The

American Stock Exchange Broker/Dealer Index

was up 2%.

One of the market's notable dogs yesterday,

Charles Schwab

(SCH)

, which had been sharply higher earlier in the session, was down 1 1/16 to 82 7/8. Schwab traded as higher as 87 5/16 a little after 10 a.m. EDT.

Oil and oil service stocks advanced handsomely. Meanwhile, the July crude oil futures contract was up 1.5% to $18.61 a barrel. The

Philadelphia Stock Exchange Oil Service Index

was up 3%, while the

Chicago Board Options Exchange Oil Index

was up 2%.

On the

New York Stock Exchange

, advancers were leading decliners 1,682 to 1,174 on 451 million shares. On the

Nasdaq Stock Market

, losers were beating winners 1,867 to 1,749 on 543 million shares.

On the NYSE, 117 issues had set new lows 52-week while 69 had touched new highs. On the Nasdaq, 63 issues had set new lows while new highs totaled 44.

On the Big Board,

America Online

(AOL)

was most active, with 22 million shares changing hands. It was up 5 1/4 to 95 3/4.

On the Nasdaq,

Qwest Communications

(QWST)

was most active, with 19 million shares changing hands. It was up 1 3/8 to 35 7/16. Qwest fell sharply yesterday in the wake of its announcement Sunday that it made a $55 billion cash and stock bid for

U S West

(USW)

and

Frontier

(FRO) - Get Frontline Ltd. Report

.

1:07 p.m.: Midday Musings: Be Vewwy Quiet, We're Hunting Bargains: Techs Turn Around

11:56 a.m.: Stocks Remain Higher Ahead of Tomorrow's CPI Data

With

Heinz

ketchup, the anticipation is "slow good." With the stock market, it's "right now."

Many market players are anticipating an explosive upward move by stocks ahead of Friday's triple-witching, if tomorrow's

CPI

figures are benign and

Federal Reserve

Chairman

Alan Greenspan

says nothing spooky during his testimony before

Congress

on Thursday. Those are two big "ifs" but investors are apparently in an optimistic mood this morning, buying a broad base of stocks (or covering shorts). Still, trading volumes remain muted, suggesting the majority of players are still waiting for the data before making any substantive bets.

"I'm settling in for another day of low volume and select activity," said Jay Meagrow, vice president of trading at

McDonald

. "I've got some great tickets but the volume is not there either way. People are waiting on CPI and I don't blame

them. The last one was huge. We'll be pushing to get to 600 million shares today

on the Big Board and they're going to have to put programs in to get it there."

In

New York Stock Exchange

trading, advancers were leading declining stocks 1,563 to 1,113 on 282 million shares. In

Nasdaq Stock Market

activity, gainers were leading 1,648 to 1,626 on 355 million shares.

Meagrow suspects traders playing the triple-witching on Friday will wait until after the CPI before they "set up anything." But after the data comes out "it's going to be a wild ride," he said. "Friday should be a lot of fun."

Cooperman Seizes Initiative

Meanwhile,

TheStreet.com

received an unsolicited phone call this morning from Leon Cooperman, senior partner at

Omega Advisors

. Cooperman, who'd apparently heard

TSC

was making inquiries about rumors floating around late last week about some firings at the hedge fund, denied there is any truth to the scuttlebutt.

"Nobody has left the macro group," he said. "We're having a very good year relative to most hedge funds and have hired seven people this year. Nobody has left."

-- Aaron L. Task

11:03 a.m.: Stocks Post Solid Gains but Volume Thin

Who knows what will happen in the late afternoon when investors start to rack their nerves over tomorrow's inflation data, but at midmorning stocks were adding to some already impressive gains.

As is always the case in low-volume times, the action is getting driven by the futures market. Because futures traders care a great deal more about technical analysis than those trading individual stocks, what the charts look like is moving stocks a lot more than usual these days. Today's chart looks good -- the June

S&P 500

contract broke a resistance level near 1316 and was lately playing near the next resistance level around 1321.

This all matters a great deal not only because things are getting driven by the futures lately, but because this Friday is triple-witching, the expiration of index futures and the options on index futures and stocks. There is still a good deal of near-the-money calls on the S&P 500, and as it threatens to go higher the people that wrote those calls are moving to cover. Which sends stocks higher still.

But unless volume picks up, any move up will be fleeting, said Greg Nie, technical analyst at

Everen Securities

. "Our motto for a rally attempt is big breadth accompanied by big volume," he said.

Nie remains constructive on the market, and expects stocks to move forward decisively late this month or early next. "If you reallly get down to the nitty grittty the overall tech picture is still leaning toward the bulls," he said.

-- Justin Lahart

9:56 a.m.: Stocks Open Higher but Net Issues Are Still Troubled

Stocks were higher early on, but Internet stocks were once lagging behind.

TheStreet.com Internet Sector

index, which is 38% off its high for the year, was down 1.94, or 0.4%.

Looming ahead for the market is tomorrow's much-anticipated release of the May

Consumer Price Index

. On Thursday,

Federal Reserve

Chairman

Alan Greenspan

is slated to testify before the

Joint Economic Committee

of

Congress

.

Most Up at Open -- NYSE

IBM (IBM) - Get International Business Machines (IBM) Report, up 2 to 117 1/2

.

Most Up at Open -- Nasdaq

Broadcom undefined, up 3 1/4 to 104 1/4

.

Most Down at Open -- NYSE

Providian Financial (PVN) , down 1 1/2 to 77

.

Most Down at Open -- Nasdaq

Go2Net (GNET) , down 4 13/16 to 101 3/16

.