Stocks Close Modestly Mixed After Big Recovery From Session Lows

The besieged tech sector boasted some decent gains by the end of the session.
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Major market gauges ended the session mixed while the besieged tech sector managed to close boasting some decent gains.

The tech-heavy

Nasdaq Composite Index

had traded as low as 2364.59. The

Nasdaq 100

rose 48.76 to close at 2074.55. Meanwhile, the

Dow Jones Industrial Average

at one point fell as much as 131.71 to 10,464.55. Those big declines in stocks were blamed on fears that the

Fed

will raise interest rates at its next meeting, at the end of June. The jitters, which have been in the market lately, were sparked today by strong new home sales data.

Scott Curtis, senior equity trader at

Brown Brothers Harriman

, said the market's rebound was more or less some short-covering and bargain hunting.

On the

New York Stock Exchange

, decliners beat advancers 1,612 to 1,334 on 730 million shares. On the

Nasdaq Stock Market

, losers beat winners 2,227 to 1,640 on 892 million shares.

On the NYSE, 53 issues set new 52-week lows while 35 touched new highs. On the Nasdaq, 62 issues set new lows while new highs totaled 55.

On the Big Board,

America Online

(AOL)

was most active, with 30.2 million shares changing hands. It was down 3 1/8 to 110.

On the Nasdaq,

Dell

(DELL) - Get Report

was most active, with 41.8 million shares changing hands. It was up 7/16 to 33 1/2.

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

3:00 p.m.: Stocks Stage Rally Off Session Lows

Stocks continued to climb further and further away from their session lows -- the

Nasdaq Composite Index

has even managed to climb into the black -- while the 30-year Treasury bond was slightly lower but off its worst levels of the session.

Both stocks and bonds have been depressed by fears the

Fed

will raise interest rates at its next meeting later this month.

The

Commerce Department

reported that sales of new homes rose 9.2% for the month of April. The department reported that the seasonally adjusted annual rate of sales rose to 978,000 in April, compared with 896,000 in March.

John Roque, senior analyst at

Arnhold & S. Bleichroeder

, said he thinks the bond market will have reached a bottom when one of two things happen: either the bond begins to absorb bad news or the Fed acts.

On the

New York Stock Exchange

, decliners were beating advancers 1,764 to 1,173 on 569 million shares. On the

Nasdaq Stock Market

, losers were beating winners 2,323 to 1,452 on 680 million shares.

On the NYSE, 50 issues had set new 52-week lows while 29 had touched new highs. On the Nasdaq, 57 issues had set new lows while new highs totaled 41.

On the Big Board,

America Online

(AOL)

was most active, with 24 million shares changing hands. It was up 1 3/8 to 114 1/2.

On the Nasdaq,

Dell

(DELL) - Get Report

was most active, with 34 million shares changing hands. It was down 1/16 to 33.

1:57 p.m.: Continued Rate-Hike Fears Hold Stocks in Negative Territory

Fears of a

Fed

interest rate hike were taking a toll on stocks while the 30-year Treasury bond recovered much of its earlier losses.

Technology and small-caps were suffering the most amid today's decline. All major market barometers have managed to climb off their session lows.

The July fed funds futures contract, used as a benchmark for what direction the Treasury market believes Fed policy will take, was lately at 4.95%, and is now factoring in an 80% chance of a rate hike by the end of June. The

Federal Open Market Committee's

next meeting is slated for June 29 and 30.

Meanwhile, Federal Reserve Chairman

Alan Greenspan

recently gave a speech in Boston, but he didn't comment on the outlook for interest rates.

On the

New York Stock Exchange

, decliners were beating advancers 1,819 to 1,033 on 476 million shares. On the

Nasdaq Stock Market

, losers were beating winners 2,395 to 1,276 on 548 million shares.

On the NYSE, 38 issues had set new 52-week lows while 25 had touched new highs. On the Nasdaq, 46 issues had set new lows while new highs totaled 37.

On the NYSE,

America Online

(AOL)

was most active, with 18 million shares changing hands. It was down 4 13/16 to 108 5/16.

On the Nasdaq,

Dell

(DELL) - Get Report

was most active, with 28 million shares changing hands. It was down 1 3/16 to 31 13/16.

1:09 p.m.: Midday Musings: Rate Fears Ratchet Up the Pressure on Net Stocks

12:00 p.m.: Stocks Remain Stuck in Negative Territory

Stocks remained mired in the mud late this morning while the Treasury market has come well off its session lows which it hit shortly after the

Commerce Department

reported new home sales surged 9.2% in April.

The seasonally adjusted annual rate of new home sales rose to 978,000 in April, compared with 896,000 in March. The news helped spark another round of fears of an interest-rate hike by the

Fed

.

Meanwhile,

Federal Reserve

Chairman

Alan Greenspan

is slated to speak soon in Boston on trade and technology.

Barnes & Noble

(BKS) - Get Report

was down slightly on news of the termination of its proposed acquisition of

Ingram Book Group

.

Meanwhile,

barnesandnoble.com

(BNBN)

, which went public last week, was recently trading below its IPO price of 18. It was down 3 3/16 to 16 7/8.

On the

New York Stock Exchange

, decliners were beating advancers 1,768 to 953 on 306 million shares. On the

Nasdaq Stock Market

, losers were beating winners 2,164 to 1,144 on 362 million shares.

On the NYSE, 34 issues had set new 52-week lows while 20 had touched new highs. On the Nasdaq, 29 issues had set new highs while new lows totaled 32.

On the NYSE,

America Online

(AOL)

was most active, with 13 million shares changing hands. It was down 7 1/8 to 106 1/16.

On the Nasdaq,

Dell

(DELL) - Get Report

was most active, with 20 million shares changing hands. It was down 1 1/4 to 31 3/4. The company today named David Allen vice president of worldwide operations.

On the mergers-and-acquisitions front,

Westwood One

(WON)

is buying

Metro Networks

(MTNT)

for $900 million in stock. Westwood was down slightly while Metro was getting hammered, down 5 15/16, or 11%, to 50 1/4.

Tech Focus

Tech sector gauges were mostly weaker. The

Nasdaq 100

was off 1%, while the

Morgan Stanley High-Tech 35

was down 2%. The

Philadelphia Stock Exchange Computer Box Maker Index

was down 1%.

The

Philadelphia Stock Exchange Semiconductor Index

was up 1%. A couple of the index's components were in the news today.

Chip giant

Intel

(INTC) - Get Report

has resisted the tech sector's downswing thanks to

Morgan Stanley Dean Witter's

reiteration of its strong buy rating on the stock. Intel was up 1/2 to 51 3/16.

Meanwhile,

Texas Instruments

(TXN) - Get Report

said it is acquiring

Telogy Networks

for about $435 million. Texas Instruments was up 1 5/16 to 107 15/16.

Elsewhere in the news,

Adobe Systems

(ADBE) - Get Report

was up 7/16 to 72 7/8, after it said it expects operating results for the second quarter to be "slightly" over the 62 cents to 66 cents a share range the company estimated in March. Revenue is anticipated to come in between $245 million and $246 million. Adobe also said it is cutting its workforce by about 9% worldwide.

The current

First Call

11-analyst forecast sees Adobe earning 64 cents in the quarter.

10:59 a.m.: New Home Sales Data Wallop Stocks

A surge in new home sales helped send stocks and bonds lower as technology, Internet and financial issues piled on to

yesterday beefy losses.

The 30-year Treasury bond was taking a hit as sales of new homes rose 9.2% for the month of April. The

Commerce Department

reported that the seasonally adjusted annual rate of sales rose to 978,000 in April, compared with 896,000 in March.

Stocks and bonds slumped yesterday in part on worries that the

Federal Open Market Committee

will raise interest rates when it meets late this month to cool down the steamy economy. Today's new home sales report only added to those woes.

Banks and brokerage stocks were getting pounded. The

Philadelphia Stock Exchange/KBW Bank Index

was off 2%, while the

American Stock Exchange Broker/Dealer Index

was down 5%.

J.P. Morgan

(JPM) - Get Report

was getting hammered and was playing the role of biggest drag on the

Dow Jones Industrial Average

so far.

Technology and Internet stocks were sharply lower. The

Nasdaq 100

was down 1%, while the

Philadelphia Stock Exchange Computer Box Maker Index

was off 2%.

On of the sectors avoiding the selloff were oil service stocks. The

Philadelphia Stock Exchange Oil Service Index

was up 3%.

Jay Suskind, head of institutional equity trading at

Ryan Beck

, said he sees a lot of nervousness in the market in part because of the bond market and the interest rate environment.

"I think the market's nervous," he said, noting that the Internet sector has "obviously petered" out.

Suskind said the bias for the market is to the downside as sentiment is more bearish than bullish.

On the

New York Stock Exchange

, decliners were beating advancers 1,672 to 880 on 210 million shares. On the

Nasdaq Stock Market

, losers were beating winners 1,991 to 1,074 on 251 million shares.

On the NYSE, 25 issues had set new 52-week lows while 15 had touched new highs. On the Nasdaq, 25 issues had set new highs while new lows also totaled 25.

On the NYSE,

America Online

(AOL)

was most active, with 10 million shares changing hands. It was down 4 1/2 to 108 1/2.

On the Nasdaq,

Dell

(DELL) - Get Report

was most active, with 14 million shares changing hands. It was down 1 5/16 to 31 3/4.

9:56 a.m.: Stocks Open Modestly Mixed

Stocks were mixed in the early going while the Treasury market's weakness continued.

Yesterday stocks slumped overall, with the tech-heavy

Nasdaq Composite Index

suffering the most, in part on fears the

Fed

will raise interest rates soon to chill off the steamy economy. Comments from some Fed officials didn't help stocks and bonds either yesterday. Several Fed officials are scheduled to speak today.

The blue-chip

Dow Jones Industrial Average

was the lone major market average to close in the green, thanks to a surge in cyclical stocks. Meanwhile, the yield on the 30-year Treasury bond rose to its highest level in more than a year.

In the news,

Texas Instruments

(TXN) - Get Report

said it is acquiring

Telogy Networks

for about $435 million.

Most Up at Open -- NYSE

Best Buy (BBY) - Get Report, up 1 3/4 to 48 5/8

.

Most Up at Open -- Nasdaq

@Entertainment (ATEN) - Get Report, up 5 1/2 to 18

: Dutch-based cable television operator

United Pan-European Communications

(UPCOY)

is buying @Entertainment, which is a Polish cable and programming company.

Most Down at Open -- NYSE

Cable & Wireless (CWZ) , down 2 3/8 to 44 7/8

.

Most Down at Open -- Nasdaq

Adforce (ADFC) , down 8 15/16 to 20

.