Stocks Lower Amid FOMC Inaction

The Dow has stayed away from the 10,000 level it closed over Monday.
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The major market averages dipped underwater this afternoon, while, as expected, the

Federal Open Market Committee

left short-term interest rates

unchanged.

The

Dow Jones Industrial Average

was down 82 to 9925. The biggest drag on the Dow was

Coca-Cola

(KO) - Get Report

, which was down 2 1/16 to 62 3/4 after it told Wall Street yesterday it expects worldwide sales to drop up to 2% in the first quarter. The beverage giant also said it doesn't expect to meet its 7% to 8% annual volume growth target in 1999.

The

S&P 500

was down 8 to 1302.

The

Nasdaq Composite Index

was down 6 to 2487. The

Russell 2000

was down 1 to 399.

TheStreet.com Internet Sector

index was down 4 to 650.

TheStreet.com E-Commerce Index

was down 1 to 111.

The 30-year Treasury bond was up 15/32 to 94 27/32, yielding 5.61%.

On the

New York Stock Exchange

, decliners were beating advancers 1,702 to 1,178 on 550 million shares. On the Nasdaq, losers were beating winners 2,163 to 1,643 on 685 million shares.

On the NYSE, 95 issues had set new 52-week lows while 32 had touched new highs. On the Nasdaq, 79 stocks had set new lows while 68 touched new highs.

On the Big Board,

America Online

(AOL)

was most active with 27 million shares changing hands. AOL was up 11 15/16, or 9%, to 144 5/16.

PaineWebber

reiterated its buy and increased its 12-month price target to 215 from 125 a share.

On the Nasdaq,

Microsoft

(MSFT) - Get Report

was most active, with 26 million shares changing hands. It was up 5/8 to 93.

Meanwhile

Priceline.com

(PCLN)

, in its first day of trading, is soaring. It was up 54 1/2, or 341%, to 70 3/8.

Morgan Stanley Dean Witter

priced Priceline.com's 10 million-share IPO above range yesterday at $16 a share. The stock opened at 81, and rose to as much as 85.

Wit Capital

initiated coverage of Priceline.com with a buy rating.

1:57 p.m.: Nasdaq Higher as Priceline.com Skyrockets

Priceline.com

(PCLN)

exploded on the upside this afternoon, skyrocketing a jaw-dropping 357%, in its first day of trading, while the major market averages were mixed.

More on Priceline.com below.

The

Dow Jones Industrial Average

was down 41 to 9967, well off its lows.

The

S&P 500

was down 2 to 1308. The

Nasdaq Composite Index

was up 12 to 2505. The

Russell 2000

was up fractionally at 400.

TheStreet.com Internet Sector

index was up 6 to 660.

TheStreet.com E-Commerce Index

was down 1 to 112.

The 30-year Treasury bond was up 18/32 to 94 29/32, yielding 5.60%.

Results of today's

Federal Open Market Committee

meeting is expected to be released around 2:15 p.m. EST. The FOMC is widely expected to stand pat on rates.

On the

New York Stock Exchange

, decliners were beating advancers 1,581 to 1,226 on 459 million shares. On the

Nasdaq Stock Market

, losers were beating winners 2,054 to 1,666 on 572 million shares.

On the NYSE, 78 issues had set new 52-week lows while 32 had touched new highs. On the Nasdaq, 69 issues had set new lows while new highs totaled 67.

On the Big Board,

America Online

(AOL)

was most active with 24 million shares changing hands. AOL was up 13 5/8, or 10%, to 146.

PaineWebber

reiterated its buy and increased its 12-month price target to 215 from 125 a share.

On the Nasdaq,

Microsoft

(MSFT) - Get Report

was most active, with 23 million shares changing hands. It was up 13/16 to 93 1/4.

Company Focus: Priceline.com

Morgan Stanley Dean Witter

priced Priceline.com's 10-million share IPO above range yesterday at $16 a share. It was up 57 1/2 to 73 1/2. The stock opened at 81, and rose as much as 85.

Wit Capital

initiated coverage on the stock today with a buy rating.

In

stories last week,

TheStreet.com

questioned the treatment of the offering on the company's Web site.

1:00 p.m.: Midday Musings: Market Regroups With Milestone Day in the Rearview

12:00 p.m.: Blue-Chips Remain Stuck in Negative Territory

Two hours into the trading day, the quo remains static. Blue-chip proxies are lower in the wake of

yesterday's media event and

Coca-Cola's

(KO) - Get Report

cautious

comments shortly thereafter. But tech gauges are on the upswing, with Internet mavens leading the charge.

The

Dow Jones Industrial Average

was again sporting just four digits, lately down 56 to 9950. The

S&P 500

was also retreating from yesterday's big advance, off 4 to 1306.

The

Nasdaq Composite Index

, however, was lately up 9 to 2502, although down from its mid-morning best of 2505.70. Meanwhile,

TheStreet.com Internet Sector

index was pushing further into record territory, higher by 7 to 661, although

TheStreet.com E-Commerce Index

was down 2 to 111.

The Comp was being led by

Dell

(DELL) - Get Report

,

Sun Microsystems

(SUNW) - Get Report

and

Cisco

(CSCO) - Get Report

.

In

New York Stock Exchange

trading, tech bellwethers such as

Compaq

(CPQ)

,

IBM

(IBM) - Get Report

and

EMC

(EMC)

are all smartly higher in active trading.

But the big story in techland continues to be

America Online

(AOL)

, lately up 11%. The darling of fund managers and retail investors alike, AOL was aided this morning by the unveiling of an alliance with Sun Microsystems to jointly develop a "unified set" of electronic commerce products for release early next year. Additionally,

PaineWebber

reiterated its buy rating on AOL and upped its price target to $215.

Among secondary (and tertiary) Net names,

AboveNet Communications

(ABOV)

was up 29% after setting a 2-for-1 stock split, while

Express Scripts

(ESRX)

was soaring 30% after the company said it will launch an online pharmacy and drug information site.

Meanwhile, traders and investors await the opening of

Priceline.com

(PCLN)

, whose 10 million-share IPO was priced last night at $16 a share vs. an expected range of $12 to $14.

The

Russell 2000

was up fractionally at 400 despite some unimpressive market internals.

In NYSE trading, declining stocks were leading advancers 1,513 to 1,194 on 320 million shares. In

Nasdaq Stock Market

activity, losers were leading 1,909 to 1,506 on 385 million shares.

Outside of the tech stocks, the group showing the biggest "pop" this morning continues to be the transports. The

Dow Jones Transportation Average

was lately up 57 to 3351

Meanwhile, as the

Federal Reserve Open Market Committee's

meeting proceeds, the price of the 30-year Treasury bond was lately up 10/32 to 94 22/32, its yield dipping to 5.62%.

--

Aaron L. Task

10:59 a.m.: Dow 10,000 Elusive Today

Now what, indeed.

When the

Dow Jones Industrial Average

secured is first-ever close above 10,000

yesterday , many market players questioned if the five-figure level could be sustained. So far this morning, the answer is a resounding "no."

A warning about lower-than-expected sales shortly

after the close yesterday by Dow member

Coca-Cola

(KO) - Get Report

pretty much assured a weak opening this morning. Throw in the

Federal Open Market Committee's

meeting today, the warfare in Kosovo, and the fact 10,000 is a darned lofty level, and it's not so surprising stocks are in retreat.

The Dow was lately down 86 to 9920, having traded as low as 9874.41 in the early going. Coca-Cola was by far the biggest drag on the index, lately down 3%.

Goldman Sachs

removed the beverage giant from its recommended list and

Morgan Stanley Dean Witter

cut its earning estimates.

"Look at when Coca-Cola came out, a few minutes after the close" said one trader. "If it had been before, there's no way we would have closed over 10,000

yesterday. I find that curious."

The trader, who is short

S&P 500

futures, conceded Coca-Cola may have waited until after the bell in the hope the announcement would get lost in the Dow 10,000 shuffle. If so, there was no such luck.

Elsewhere, the S&P 500 was off 7 to 1303, while the

Russell 2000

was down fractionally at 400.

However, technology bellwethers and Internet stalwarts were able to overcome the early misgivings. The

Nasdaq Composite Index

was recently up 10 to 2503 after trading as low as 2477.62 in the opening moments of the session.

Sun Microsystems

(SUNW) - Get Report

and

Cisco

(CSCO) - Get Report

were leading the Nasdaq higher.

TheStreet.com Internet Sector

index was up 10 to 664, led by

America Online

(AOL)

, up 10% after

PaineWebber

reiterated its buy rating and upped its price target to $215. Other Net leaders such as

Amazon.com

(AMZN) - Get Report

and

Yahoo!

(YHOO)

were also on the rise. However,

TheStreet.com E-Commerce Index

was down 1 to 112.

The continued strength of high-profile tech names as well as a solid performance this morning by the transports -- the

Dow Jones Transportation Average

was lately up 46 to 3340 -- has some players confident any slide from yesterday's gains will be modest, at worst. Others, however, are less constructive.

"We need to nominally pull back to 9500 or we're on borrowed time," Ronny Kraft, CEO of

Gotham Capital Management

, said late yesterday in the wake of the Dow's historic close. "The earnings needed to support these levels are not going to be there."

As the FOMC meeting proceeds, the price of the 30-year Treasury bond was lately up 7/32 to 94 18/32, its yield dipping to 5.63%.

--

Aaron L. Task

9:59 a.m.: Stocks Drop After Monday's Historic Close

The

Dow Jones Industrial Average

tumbled early on after

yesterday's historic close above 10,000, while the rest of the market's major averages also opened on the downside.

The Dow was down 132 to 9875. Dow component

Coca-Cola

(KO) - Get Report

, which yesterday said it expects worldwide sales to drop up to 2% in the first quarter, was down 3, or 5%, to 61 13/16. The beverage titan also said it doesn't expect to meet its 7% to 8% annual volume growth target in 1999.

Meanwhile in Washington, the

Federal Open Market Committee

is meeting. The FOMC is expected to stand pat on short-term interest rates.

The

S&P 500

was down 15 to 1296. The

Nasdaq Composite Index

was down 15 to 2478. The

Russell 2000

was down 2 to 398.

TheStreet.com Internet Sector

index was up 4 to 650.

TheStreet.com E-Commerce Index

was down 2 to 111.

The 30-year Treasury bond was up 13/32 to 94 24/32, yielding 5.62%.

Most Up at Open -- NYSE

Vodafone (VOD) - Get Report, up 2 13/16 to 181 1/4

.

Most Up at Open -- Nasdaq

AboveNet (ABOV) , up 13 1/8 to 94

: The company set a 2-for-1 stock split.

Most Down at Open -- NYSE

EMC (EMC) , down 2 to 127 5/8

.

Most Down at Open -- Nasdaq

Avid Technology (AVID) - Get Report, down 6 5/8 to 17 3/4

: The company restated third-quarter results to a net loss of 89 cents a share from a loss of $5.97 a share.

Prudential Securities

downgraded the stock to hold from accumulate.

--

Brian Louis