Stocks Hit by Late Selloff

The Nasdaq manages to eke out a small gain to close out at another record high.
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A late-afternoon selloff knocked the

Dow Jones Industrial Average

and

Russell 2000

into negative territory, while the

Nasdaq Composite Index

and

S&P 500

only managed slight gains on the day.

Internet stocks fell considerably.

The Dow slumped 19.31, or 0.2%, to 9335.91. The Dow had risen as much as 124.87 to 9480.09 during the session. The

Russell 2000

dropped 0.29, or 0.1%, to 430.60.

Despite giving up a huge portion of its gains, the Nasdaq Comp did manage to close at a record high. The Nasdaq Comp closed up 7.36, or 0.3%, to 2415.53.

The

S&P 500

rose 4.60, or 0.4%, to 1256.60.

Internet stocks gave up a huge chunk of the gains made yesterday.

TheStreet.com Internet Sector

index fell 39.41, or 7.2%, to 508.85.

The 30-year Treasury bond was down 14/32 to 101 8/32, yielding 5.17%.

Traders and investors today waded through a host of earnings reports and

Federal Reserve

Chairman

Alan Greenspan's

testimony before the

House Ways and Means Committee

. Greenspan said that with corporate profits sagging over recent quarters and the "unusual nature" of the rebound in the market since last fall, "the recent performance of the equity markets will have difficulty in being sustained."

On the

New York Stock Exchange

, decliners beat advancers 1,557 to 1,459 on 905 million shares. On the

Nasdaq Stock Market

winners beat losers 2,082 to 2,042 on 1.278 billion shares.

On the NYSE, 106 issues set new 52-week lows while 47 touched new highs. On the Nasdaq, 207 issues set new highs while new lows totaled 29.

On the Big Board,

Philip Morris

(MO) - Get Report

, the world's largest tobacco company, was most active, with 25.2 million shares changing hands. It was down 2 3/8 to 48 7/16. The stock was hurt in part by news that the

Justice Department

is preparing a litigation plan to take the tobacco companies to court in an effort to recover the cost of paying for smoking-related illnesses.

On the Nasdaq,

Microsoft

(MSFT) - Get Report

was most active on volume of 31.2 million shares. It was up 7 to 162 1/2. Microsoft reported better-than-expected earnings after the close

yesterday .

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

.

3:02 p.m.: Stocks Jump as Greenspan Comments Ignored

The

Nasdaq Composite Index

has leapt 2%, leading the major averages higher, as the stock market shrugged off cautionary comments from

Federal Reserve

Chairman

Alan Greenspan

.

The Nasdaq Comp was up 49 to 2457. The

Dow Jones Industrial Average

was up 101 to 9456. The

S&P 500

was up 20 to 1272. The

Russell 2000

was up 3 to 434.

Internet stocks slumped.

TheStreet.com Internet Sector

index was down 6 to 542 after enjoying a sharp runup yesterday.

Greenspan, in prepared remarks before the

House Ways and Means Committee

, said that with corporate profits sagging over recent quarters and the "unusual nature" of the rebound in the market since last fall, "the recent performance of the equity markets will have difficulty in being sustained."

Greenspan's comments overall were anything but bullish for stocks, but

last night's earnings report from

Microsoft

(MSFT) - Get Report

set the tone for today, analysts said.

"I thought the market's reaction was very puzzling," said Ricky Harrington, senior vice president and technical analyst at

Interstate/Johnson Lane

, referring to the rally in the face of the Fed chief's testimony. He said that in his impression, the comments Greenspan made should have taken the market to the downside.

But "the tech stocks continue to go up. That is the main story," he said. "Microsoft set the tone today."

Harrington noted that the Nasdaq Comp has gone up the equivalent of more than 1,000 Dow points since last Wednesday. Harrington added, however, that the advance is pushed up by only a handful of stocks, which he calls the "Nifty Five."

Bonds were getting pounded. The 30-year Treasury bond was lately down 24/32 to 100 30/32, yielding 5.19%.

On the

New York Stock Exchange

, advancers were beating decliners 1,601 to 1,346 on 202 million shares. On the

Nasdaq Stock Market

winners were beating losers 2,106 to 1,865 on 1.001 billion shares.

On the NYSE, 101 issues had set new 52-week highs while 43 had touched new lows. On the Nasdaq, 199 issues had set new highs while new lows totaled 25.

On the Big Board,

Philip Morris

(MO) - Get Report

, the world's largest tobacco company, was most active, with 23 million shares changing hands. It was down 2 5/16 to 48 1/2.

On the Nasdaq, Microsoft was most active on volume of 26 million shares. It was lately up 9 11/16, or 6%, to 165 1/4.

2:00 p.m.: Stocks Rally Continues

Stocks rallied in the face of cautionary comments from

Federal Reserve

Chairman

Alan Greenspan

on stock valuations.

The market today has had to deal with Greenspan's appearance before the

House Ways and Means Committee

and a deluge of earnings reports from some of the country's corporate giants.

The tech-heavy

Nasdaq Composite Index

has vastly outperformed the rest of the market's major averages and was lately up 55 to 2463.

The

Dow Jones Industrial Average

shrugged off some slight weakness earlier in the session and was lately up 102 to 9457. The

S&P 500

was up 20 to 1272. The

Russell 2000

was up 4 to 434.

Internet stocks slumped.

TheStreet.com Internet Sector

index was down 1%.

The 30-year Treasury bond was lately down 31/32 to 100 24/32, yielding 5.20%.

Greenspan, in prepared remarks before the House panel earlier, said that with corporate profits sagging over recent quarters, "The recent behavior of profits also underlines the unusual nature of the rebound in equity prices and the possibility that the recent performance of the equity markets will have difficulty in being sustained."

On the

New York Stock Exchange

, advancers were beating decliners 1,586 to 1,305 on 602 million shares. On the

Nasdaq Stock Market

winners were beating losers 2,096 to 1,787 on 862 million shares.

On the NYSE, 95 issues had set new 52-week highs while 40 had touched new lows. On the Nasdaq, 188 issues had set new highs while new lows totaled 22.

On the Big Board,

Philip Morris

(MO) - Get Report

, the world's largest tobacco company, was most active, with 21 million shares changing hands. It was down 1 15/16 to 48 7/8.

On the Nasdaq,

Microsoft

(MSFT) - Get Report

was most active on volume of 24 million shares. It was lately up 10 5/16, or 7%, to 165 15/16. Mister Softee reported better-than-expected earnings after the close

yesterday .

Focus: More Trouble For Tobacco

The tobacco industry was greeted with a big dose of bad news last night when

President Clinton

, in his State of the Union address, announced that the

Justice Department

is preparing a litigation plan to take the tobacco companies to court in an effort to recover the cost of paying for smoking related illnesses.

The news helped send share tobacco company stock prices lower.

A lawsuit being prepared by Justice could seek billions of dollars from the tobacco industry,

Reuters

reported late this morning, citing a senior Clinton administration official who spoke on condition of anonymity.

Most tobacco stocks were lower. The

American Stock Exchange Tobacco Index

was lately down 2%.

British American Tobacco

(BTI) - Get Report

fell 1 1/4 to 20 1/2;

RJR Nabisco

(RN)

was up 1/8 to 28 1/8; and

Loews

(LTR)

was off 2 1/8 to 91 1/2.

Last year, tobacco companies agreed to settle claims against it with 46 states for $206 billion. Mississippi, Florida, Texas and Minnesota had previously settled with the industry for a total $40 billion.

12:58 p.m.: Midday Musings: Greenspan Falls in the Forest, Makes No Sound

12:05 p.m.: Tech Stocks Rally

Tech stocks were flying, while

Federal Reserve

Chairman

Alan Greenspan

is currently in the midst of a question-and-answer period before the

House Ways and Means Committee

.

The tech-laden

Nasdaq Composite Index

was lately up 60, or 2%, to 2468.

Bolstering the tech sector,

Microsoft

(MSFT) - Get Report

after the close yesterday reported second-quarter earnings of 73 cents a share, crushing the

First Call

23-analyst outlook, which called for 59 cents and better than the year-ago's 42 cents.

The

Dow Jones Industrial Average

was up 74 to 9429. The

S&P 500

was up 17 to 1269. The

Russell 2000

was up 4 to 435.

Internet stocks, which soared yesterday, were sitting out today's tech rally overall.

TheStreet.com Internet Sector

was lately up only 3 to 552.

Amazon.com

(AMZN) - Get Report

was a drag on the index, falling 15 7/16, or 11%, to 125, after

CIBC Oppenheimer

analyst Henry Blodget -- the analyst who late last year slapped a $400 price target on the stock -- said he was not going to raise his 12-month price target on the stock.

The 30-year Treasury bond was lately down 30/32 to 100 24/32, yielding 5.20%.

Greenspan, in prepared testimony before the panel, noted that corporate profits have slumped over recent quarters, adding: "The recent behavior of profits also underlines the unusual nature of the rebound in equity prices and the possibility that the recent performance of the equity markets will have difficulty in being sustained. The level of equity prices would appear to envision substantially greater growth of profits than has been experienced of late."

He also noted that the Fed didn't ease interest rates last fall to "prop up equity prices." "We were not attempting to prop up equity prices, nor did we plan to continue to ease rates until equity prices recovered, as some have erroneously inferred," the chairman said.

The G-Man also said that although the economy's growth is widely expected to moderate as 1999 rolls along, "signs of an appreciable slowdown as yet remain scant."

On the

New York Stock Exchange

, advancers were beating decliners 1,540 to 1,195 on 397 million shares. On the

Nasdaq Stock Market

winners were beating losers 1,948 to 1,561 on 570 million shares.

On the NYSE, 76 issues had set new 52-week highs while 29 had touched new lows. On the Nasdaq, 162 issues had set new highs while new lows totaled 13.

On the Big Board,

Philip Morris

(MO) - Get Report

was most active, with 15 million shares changing hands. It was down 2 5/8 to 48 3/16.

On the Nasdaq, Microsoft was most active on volume of 20 million shares. It was lately up 10 3/8, or 7%, to 166.

Tech Focus

Among the major tech indices, the

Philadelphia Stock Exchange Computer Box Maker Index

was up 4%, the

Morgan Stanley High-Tech 35

was up 3% and the

Nasdaq 100

was up 3%. The

Philadelphia Stock Exchange Semiconductor Index

was up 6%.

In earnings news today,

Texas Instruments

(TXN) - Get Report

posted fourth-quarter earnings of 59 cents a share, excluding charges, beating the 22-analyst First Call consensus estimate of 54 cents and up from the year-earlier 55 cents. It was up 3 15/16, or 4%, to 98 9/16.

DoubleClick

(DCLK)

reported a fourth-quarter loss of 25 cents a share, beating the seven-analyst First Call estimate by a penny and up from the year-earlier 33 cents. DoubleClick, an Internet advertising company, was lately up 23 5/16, or 26%, to 111 1/4. The stock was upgraded today by

BT Alex. Brown

to strong buy from buy.

11:04 a.m.: Stocks Rise amid Greenspan Remarks

The

Nasdaq Composite Index

continued to soar while the

Dow Jones Industrial Average

fell slightly underwater before snapping back into positive territory as

Federal Reserve

Chairman

Alan Greenspan

delivered remarks before the

House Ways and Means Committee

.

The question-and-answer period has now begun.

Greenspan, in prepared testimony before the panel, noted that corporate profits have slumped over recent quarters, adding: "The recent behavior of profits also underlines the unusual nature of the rebound in equity prices and the possibility that the recent performance of the equity markets will have difficulty in being sustained. The level of equity prices would appear to envision substantially greater growth of profits than has been experienced of late."

Greenspan said that although the "pace of economic expansion is widely expected to moderate as 1999 unfolds, signs of an appreciable slowdown as yet remain scant."

He also noted that the Fed didn't ease interest rates last fall to "prop up equity prices." "We were not attempting to prop up equity prices, nor did we plan to continue to ease rates until equity prices recovered, as some have erroneously inferred," the chairman said.

The Nasdaq Comp was lately up 50 to 2458. Elsewhere, the Dow was up 27 to 9283. The

S&P 500

was up 11 to 1263.

The small-cap

Russell 2000

was up 3 to 433.

TheStreet.com Internet Sector

index was down fractionally at 548.

The 30-year Treasury bond was lately down 1 4/32 to 100 19/32, yielding 5.21%.

Back in the stock market, tobacco stocks were big losers today in the wake of

President Clinton's

surprise assault on the tobacco industry in his State of the Union address last night. He said the

Justice Department

is preparing a litigation plan to take the tobacco companies to court in an effort to recover the cost of paying for smoking-related illnesses.

"The states have been right about this: taxpayers shouldn't pay for the costs of lung cancer, emphysema, and other smoking-related illnesses. The tobacco companies should," the president said.

The

American Stock Exchange Tobacco Index

was lately down 3%.

Clinton's plan of investing Social Security money in the stock market -- which he talked about last night -- didn't find a fan in Greenspan. The Fed chief today came out against the idea this morning in his appearance before the House panel.

Market breadth was positive. On the

New York Stock Exchange

, advancers were beating decliners 1,393 to 1,212 on 271 million shares. On the

Nasdaq Stock Market

, winners were beating losers 1,792 to 1,450 on 400 million shares.

On the NYSE, 67 issues had set new 52-week highs while 21 had touched new lows. On the Nasdaq, 134 issues had set new highs while new lows totaled 11.

9:54 a.m.: Nasdaq Jumps at Open

It's doing it again.

The

Nasdaq Composite Index

was blasting off early on, surging 2%, outpacing the rest of the market, powered by

Microsoft

(MSFT) - Get Report

, which blew past analysts' estimates yesterday when it reported second-quarter earnings after the close.

Microsoft earned 73 cents a share, beating the

First Call

23-analyst outlook of 59 cents and up from the year-earlier 42 cents. It was lately up 10 76/16 to 166.

The Nasdaq Comp was up 39 to 2447.

The

Dow Jones Industrial Average

was down 1 to 9354. The

S&P 500

was up 4 to 1256. The

Russell 2000

was up 3 to 434.

TheStreet.com Internet Sector

was up 6 to 554.

The 30-year Treasury bond was lately down 31/32 to 100 24/32, yielding 5.20%.

At 10 a.m. EST,

Federal Reserve

Chairman

Alan Greenspan

is slated to begin testimony before the

House Ways and Means Committee

.

Most Up at Open -- NYSE

Nokia

(NOK.A)

, up 4 1/2 to 148 1/2.

Most Up at Open -- Nasdaq

Microsoft (MSFT) - Get Report, up 11 5/16 to 166 15/16

.

Most Down at Open -- NYSE

AMR (STM) - Get Report, down 1 3/4 to 62 1/2

: The parent of

American Airlines

posted fourth-quarter earnings of $1.09 a share, falling short of the 11-analyst First Call view of earnings of $1.16 a share and down from the year-ago $1.16.

Most Down at Open -- Nasdaq

Compuware (CPWR) , down 6 1/16 to 66

.