Can't say if it was an emergency, but somebody pulled the cord today, derailing the stock market's locomotive just as it was picking up another head of steam. Solid midday gains evaporated, as did the opportunity for more records.

The

Dow Jones Industrial Average

, once as high as 9798.93, retreated for much of the afternoon to close down 33.86, or 0.4%, at 9693.75.

AT&T

(T) - Get Report

was the biggest Dow decliner, followed by

Hewlett-Packard

(HWP)

.

Walt Disney

(DIS) - Get Report

slid 5.2% after

Goldman Sachs

cut its earnings estimates.

IBM

(IBM) - Get Report

was the Dow's best performer, along with

American Express

(AXP) - Get Report

, which led a strong performance among financial stocks;

Donaldson Lufkin & Jenrette

(DLJ)

soared 8.8%.

The

S&P 500

traded as high as 1293.74 but was unable to build on

yesterday's record, closing down 2.89, or 0.2%, at 1279.84. The

Russell 2000

slid 0.86, or 0.2%, to 399.20.

Technology stocks spearheaded the early gains but also led the reversal. The

Nasdaq Composite Index

closed off 4.68, or 0.2%, to 2392.94 after hitting an intraday high of 2433.37.

Microsoft

(MSFT) - Get Report

was strong throughout, rising 1.7%.

The Seattle Times

reported the software giant is considering a settlement with the

Justice Department

in its antitrust trial.

Dell

(DELL) - Get Report

fell 2.9% after being downgraded by

SG Cowen

, but chip makers led tech's decliners. The group initially looked beyond

last night's profit warning from

Advanced Micro Devices

(AMD) - Get Report

but went south when rumors about an

Intel

(INTC) - Get Report

shortfall surfaced late in the day.

'As long as rates remain basically steady and earnings continue to outperform the market will trend higher,' said Bankers Trust's Anthony Conroy. 'But a lot of people are saying 10,000 is next and they want it in a straight line. I don't think they're going to get it.'

The

Philadelphia Stock Exchange Semiconductor Index

fell 4%. Intel slid 3.6%, while AMD shed 7.6% and

Texas Instruments

(TXN) - Get Report

fell 5.5%. Additionally,

Applied Materials

(AMAT) - Get Report

lost 6.9% and

Novellus Systems

(NVLS)

shed 8.5%.

Internet names back-stepped from early gains.

TheStreet.com Internet Sector

index, traded as high as 594.16 (which would have been a new closing high) but closed down 2.54, or 0.4%, at 568.89.

TheStreet.com E-Commerce Index

managed to gain 1.55, or 1.5%, to 104.41, but finished off its intraday best of 107.34.

"We did have a pretty nasty turnaround in the middle of the day but we've had a huge move up," said Anthony Conroy, head of stock trading at

Bankers Trust

. "For a healthy market you've got to fall back for technical reasons. As long as rates remain basically steady and earnings continue to outperform the market will trend higher. But a lot of people are saying 10,000 is next and they want it in a straight line. I don't think they're going to get it."

Conroy cited a list of familiar issues, both international and domestic, traders are focused upon. But the "three things that move the market are tech, tech and tech," he said. "We lost a little leadership with tech falling off."

In

New York Stock Exchange

trading 803.7 million shares traded while declining stocks bested advancers 1,664 to 1,344. In

Nasdaq Stock Market

activity 1.038 billion shares were exchanged -- the first billion-share day since Feb. 5 -- while losers led 2,244 to 1,721. New 52-week lows led new highs 88 to 72 on the Big Board and by 105 to 73 in over-the-counter trading.

Inflation Is Dead. Or Is It?

The bond market laid the foundation for equities to run higher, even if stocks didn't follow through.

The price of the 30-year Treasury bond rose 27/32 to 95 28/32, its yield dipping to 5.53%. The long bond was down considerably until the

Labor Department

reported higher-than-expected fourth-quarter productivity figures.

The data provided further grist for the "strong growth without inflation" mill, pleasing some traders. But others, noting the recent strength in both oil and gold prices, say inflation may yet have the last laugh.

Some noted unusually heavy trading volume in mining concerns such as

Placer Dome

(PDG)

, in which 2.6 million shares traded, its highest volume since Dec. 16.

Given the recent rise in gold prices, the volume spike is not unusual, traders said; gold rose as high as $295.50 an ounce today before closing up 70 cents at $293.40.

"It's nothing out of the ordinary given bullion broke out of resistance levels to the upside," said James Mountain, managing director and co-head of institutional equity at

Scotia Capital Markets

in Toronto. "Senior gold stocks trade in very close correlation to incremental moves in bullion, up or down. The thing is, there are widely varying beliefs to whether the move in bullion is sustainable or a short-term technical blip. There's been a good two-way market in these stocks for that reason."

Other traders noted Placer is an institutional favorite and the subject of recent takeover rumors.

Ronny Kraft, CEO of hedge fund

Gotham Capital Management

, who is long Placer Dome, said the action in gold stocks gets to the heart of an ongoing war regarding inflation's potential reemergence.

"It seems like someone is really defending a short position in gold or Placer Dome, or taking some dry powder and making the short bigger," Kraft said, noting "huge blocks" went off all day in Placer, including one 160,000-share offer to sell at 12 15/16. The identity of the seller could not be determined. Placer reached as high as 12 15/16 before closing unchanged at 12 3/8.

"There is a community that thinks inflation is not done," the hedge-fund manager continued. "If interest rates are indeed rising and

the price of gold crosses $300, there's going to be a heck of a short squeeze."

Kraft "firmly" believes Japan has bottomed and said "we could potentially see the

Fed

raise rates." Oil prices have been "ticking up in front of an

OPEC

meeting that could be totally benign," he noted. Additionally, fed funds futures have "already priced in a quarter point rate hike," money supply continues to accelerate, equity valuations are "ridiculous" and "everyone is getting orgasmic about

Dow 10,000."

But the hedge-fund manager is not fully convinced and wasn't biting at that 12 15/16 offer for Placer Dome. "I'm not buying the oil breakout yet," he said. "But I think gold makes sense if the breakout in oil is real. Oil is at the center of it."

Crude oil futures rose as high as $14.03 a barrel today before closing up 22 cents to $13.85 barrel.

Among other indices, the

Dow Jones Transportation Average

rose 12.54, or 0.4%, to 3300.85; the

Dow Jones Utility Average

was off 4.22, or 1.4%, to 295.01; and, the

American Stock Exchange Composite Index

was off 0.73, or 0.1%, to 711.45.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

slipped 15.06 to 6488.37 and the

Mexican Stock Exchange IPC Index

leapt 107.25, or 2.4%, to 4568.10.

Tuesday's Company Report

By Heather Moore
Staff Reporter

(

Earnings estimates from First Call; new highs and lows on a closing basis unless otherwise specified. Earnings reported on a diluted basis unless otherwise specified.

)

Intel tumbled 4 1/4 to 115 5/16, as mentioned earlier, on market chatter that the chip giant is preparing to warn of a first-quarter earnings shortfall. The 32-analyst outlook calls for quarter earnings of $1.10 a share vs. the year-ago 81 cents.

Also noted above, Microsoft picked up 2 11/16 to 161 13/16 on a report it's looking at ways to settle the government's antitrust lawsuit before it resumes next month. Meanwhile, SG Cowen lowered its recommendation on Mister Softee to buy from strong buy.

RJR Nabisco

(RN)

lifted 1/8 to 28 3/4, off its session high of 31, after announcing it will sell its international tobacco business to

Japan Tobacco

for $8 billion, including the assumption of $200 million of debt. RJR also plans to spin off its domestic tobacco unit, separating it from the company's

Nabisco Holdings

(NA)

food business. The spinoff is expected to follow the completion of the international tobacco sale. Nabisco Holdings added 5/16 to 44 15/16 following an upgrade to accumulate from neutral at

Merrill Lynch

.

Mergers, acquisitions and joint ventures

CMGI

(CMGI)

dropped 5 5/16 to 194 7/16, off its intraday high of 226, after its CEO, David S. Wetherell, resigned from

Lycos'

(LCOS)

board, calling Lycos' deal to merge with parts of

USA Networks

(USAI) - Get Report

"inadequate for Lycos shareholders." CMGI is Lycos' largest stockholder. In an interview with

Reuters

, Wetherell said his firm hired

Morgan Stanley Dean Witter

to try to get other shareholders to press for changes in the proposed deal that would put television executive

Barry Diller

in charge of a new television-electronic commerce entity. The deal has been seen as more favorable to USA Networks and has caused Lycos shares to shed more than a third of their value at times since early February. USA Networks lost 13/16 to 37 11/16. Lycos, which said this morning it "remains fully committed to the USA/Lycos Interactive Networks transaction," hopped up 12 1/4, or 14.6%, to 96 1/4.

TSC

took a closer look at opposition to the deal in a

piece this afternoon.

Earnings/revenue reports and previews

Alcan Aluminum

(AL) - Get Report

shaved off 1 1/8 to 23 11/16 after warning it sees first-quarter earnings falling below estimates. The 12-analyst estimate called for a first-quarter profit of 31 cents a share vs. the year-ago 55 cents. Last week,

Reynolds Metals

(RLM) - Get Report

, which gained 1/8 to 43 1/16, warned of a first-quarter loss due to low aluminum prices and the devaluation of Brazil's currency.

Alcoa

(AA) - Get Report

fell 1 11/16 to 37 7/8.

AMD declined 1 7/16, or 7.6%, to 17 1/2 after last night's warning of a first-quarter loss. The company cited a failure to meet its goal of shipping 5.5 million K-6 processors during the quarter and said that it will take charges during the second and third quarters to cut 300 positions. The 21-analyst outlook called for a first-quarter loss of 9 cents a share vs. the year-ago loss of 39 cents. Today, Morgan Stanley Dean Witter lowered its 1999 earnings estimate for the company to a loss of 20 cents a share from a profit of a dime.

TheStreet.com

wrote about the company's disappointing announcement

this morning.

Borders

(BGP)

excelled 9/16 to 14 5/16 after reporting fourth-quarter earnings of $1.06 a share, beating the 11-analyst estimate by a penny and moving ahead of the year-ago 96 cents.

EMC

(EMC)

popped up 3 1/6 to an all-time high of 114 1/16 after the company said it expects to grow by 30% this year and generate $10 billion in revenue in 2001 at Morgan Stanley Dean Witter's technology conference in California yesterday.

H.J. Heinz

(HNZ)

sloughed off 1 1/8 to 50 7/8 after posting third-quarter earnings of 60 cents a share, in line with the 16-analyst estimate and up from the year-ago 55 cents.

Hypercom

(HYC)

plunged 4 1/8, or 42.3%, to 5 5/8 after saying it expects to report a third-quarter loss of 6 cents to 9 cents a share. The three-analyst forecast called for earnings of 16 cents vs. the year-ago 11 cents.

Lehman Brothers

lowered the stock to neutral from buy, and dropped its price target for the company to 8 to 9 a share from 16.

Industrial Distribution Group

(IDG)

gave up 5/8, or 9.3%, to 6 1/8 after posting fourth-quarter earnings of 17 cents, in line with the three-analyst estimate and up from the year-ago 12 cents. The company also named Richard Seigel acting chairman and CEO.

Integrated Health Services

(IHS)

lifted 5/16 to 6 3/16 after recording fourth-quarter earnings of 37 cents a share, beating the seven-analyst estimate by a penny but falling behind the year-ago 61 cents.

O'Sullivan Industries Holdings

(OSU)

shot up 1 9/16, or 14.8%, to 12 1/8 after last night saying it expects to report third-quarter earnings of 40 cents a share thanks to stronger sales and improvements in manufacturing productivity. The three-analyst view called for 31 cents vs. the year-ago 23 cents.

Schulman

(SHLM) - Get Report

lost 1 15/16, or 12.6%, to 13 1/2 after saying it sees second-quarter earnings falling below estimates and the year-ago figure and that the second half of the year will be "difficult." The company said it has yet to recover from seasonal softening, especially in Europe. The six-analyst forecast called for earnings of 33 cents vs. the year-ago 31 cents.

SteriGenics International

(STER)

collapsed 6, or 36.9%, to an all-time low of 10 1/4 after last night saying it expects to report fourth-quarter earnings of 22 cents to 25 cents a share. The three-analyst prediction called for 28 cents vs. the year-ago 21 cents. The company blamed lower-than-expected volumes in selected markets within the medical sterilization unit. Today,

PaineWebber

lowered the stock to attractive from buy.

In other earnings news:

Offerings and stock actions

RoweCom

(ROWE)

soared 8 9/16, or 53.5%, to 24 1/2, off its session high of 37 5/8, after

J.P. Morgan

priced its 3.1 million-share IPO top-range last night. The company offers access to an online catalog of newspapers, magazines and books. Elsewhere in new offerings,

Argosy Education

(ARGY)

fell 9/16 to 13 7/16 after

Salomon Smith Barney

priced its 2 million-share IPO bottom-range last night. The company provides post-graduate education with a focus on doctoral-level programs.

Analyst actions

American Home Products

(AHP)

gained 1 3/4 to an all-time high of 62 1/4 after Merrill Lynch raised it to near-term accumulate from neutral, maintaining its long-term buy.

Credence Systems

(CMOS)

swelled 2 13/16, or 15.9%, to 20 5/8 after

Credit Suisse First Boston

raised it to buy from hold.

Excel Switching

(XLSW)

expanded 2, or 9%, to 24 1/4 after

John G. Kinnard

initiated coverage with a buy and a price target of 31 a share.

Galileo Technology

(GALT) - Get Report

spiked up 2 9/16, or 11.5%, to 25 after

Dain Rauscher Wessels

raised it to buy from neutral, citing a strong outlook for the second half of the year.

Go2Net

(GNET)

reeled in 18 1/4, or 27.3%, to an all-time high of 84 7/8 after

ING Baring Furman Selz

began coverage with a strong buy.

Wisconsin Central

(WCLX)

dropped 1, or 6.7%, to 14 after Morgan Stanley Dean Witter lowered it to neutral from outperform.

Miscellany

Fluor

(FLR) - Get Report

skidded 1 3/4 to 34 5/16 after announcing it will eliminate 4,000 jobs from its engineering, procurement and construction business and cut 1,000 overhead positions as part of its restructuring program. The company plans to take a $130 million second-quarter charge for the restructuring.

Japan's

Sony

(SNE) - Get Report

climbed 8 3/16, or 9.5%, to 94 after last night saying it will make

Sony Music Entertainment

and two other units wholly owned subsidiaries. The company will also cut 17,000 jobs over four years and slice the number of manufacturing facilities worldwide to 55 from 70.