Technology's furious assault on the sense and sensibilities of traditional investing rules was taking a respite this morning. Stock proxies were mixed as lunchtime beckoned on Wall Street, with the

Nasdaq Composite Index

taking the heaviest hit.

Activity was light, which traders attributed to both the absence of many players in this holiday-shortened week and today's meeting of the

Federal Reserve's

rate-setting body.

Results of the Fed's meeting are expected around 2:15 p.m. EST. Ahead of the announcement, the price of the 30-year Treasury bond was lately down 17/32 to 102 5/32, its yield rising to 5.11%. Traders said the bond market is reacting to international developments, however, not disappointment another ease is not forthcoming as few expect the Fed to change rates today.

"For the first time the Fed is ahead of the curve on policy," said Joe Battipaglia, chairman of investment policy at

Gruntal

. "With this admission that inflation is beaten and it's the stability of the economy that counts, the Fed can look at everything in totality and decide to ease. But they will not ease today -- they'll save that policy decision perhaps into the second half of next year."

Having risen to a series of record highs in recent weeks (including

yesterday) and gaining a stunning 57.5% since the intraday lows hit

Oct. 8, it's not unfair to say the Nasdaq is due for a rest; the tech-plumed index was lately down 12 to 2126 but up from its earlier decline to as low as 2105.54.

The

Dow Jones Industrial Average

, meanwhile, was lately up 21 to 9010 after having traded as low as 8948.68. Of late, strength in

Merck

(MRK) - Get Report

and

Procter \& Gamble

(PG) - Get Report

was most supportive of the blue-chip proxy.

Other major stock gauges were lower, but modestly. The

S\&P 500

was off a fraction to 1203 and the

Russell 2000

was lower by 2 to 400.

Save for

Cisco

(CSCO) - Get Report

and

Dell

(DELL) - Get Report

, the majority of traditional tech bellwethers were lower at midday.

Intel

(INTC) - Get Report

and

Sun Microsystems

(SUNW) - Get Report

were exerting the heaviest downward tug on both the Nasdaq Comp and the

Nasdaq 100

, lately down 0.6%.

After sliding early, Internet champions were on the rebound;

TheStreet.com Internet Sector

index, once as low as 402.25, lately was down 2 to 418. Embodying the sector's turnaround (and the volatility) was

Amazon.com

(AMZN) - Get Report

, lately up 1.4% at 323 1/2 after having traded as low as 308 5/8. Additionally,

America Online

(AOL)

was up 6.1% after

Prudential Securities

reiterated its strong buy recommendation.

Further proving the Internet frenzy has not abated,

Ameritrade

(AMTD) - Get Report

was up 41% after the online broker forecast its fiscal first-quarter earnings will be higher than expected. Additionally,

iMall

(IMAL)

was higher by 82% after reaching an agreement with

AT\&T

(T) - Get Report

to provide discounts to

AT\&T WorldNet

users at iMall's online shopping services.

"Sure I'm concerned about when the Internet/high-tech bubble is going to burst,

but no mere mortal knows when a top is and I would not get in its way," said Alfred Goldman, chief market strategist at

A.G. Edwards \& Sons

. "We're up in the last four or five days and we're going to give some back, but I don't think we pull back for more than a half-day or a day and a half."

In the short term, seasonal factors will support the broader market, Goldman said. "I think the year-end rally started last Tuesday. The market gives fleeting attention to extraneous events such as war and impeachment and focuses on the outlook for the economy."

Due mainly to a belief the economy will not fall into recession and corporate earnings will be "up, although not up, up and away," the strategist remains optimistic on the prospects for stocks in 1999, forecasting about 10% gains for the "popular averages." More than the percentage, Goldman is focused on the "direction" of the market, adding "I feel very strongly the market will be up a year from now."

In

New York Stock Exchange

trading, 367 million shares were exchanged while declining stocks led advancers 1,719 to 1,110. Losers led 2,297 to 1,481 in

Nasdaq Stock Market

activity, where 502 million shares have traded.

Among other indices, the

Dow Jones Transportation Average

was down 1%, the

Dow Jones Utility Average

was off 0.5% and the

American Stock Exchange Composite Index

was higher by 0.3%.

Tuesday's Midday Movers

By

Heather Moore
Staff Reporter

As noted above, Ameritrade was up 8 11/16, or 41.4%, to 29 7/8 after announcing it expects first-quarter earnings to come in above estimates thanks to strong transaction volumes. The company now sees earnings of 9 cents to 11 cents a share. The six-analyst

First Call

consensus called for 6 cents vs. the year-ago loss of 39 cents. Ameritrade guided down estimates to 6 cents to 7 cents in early December due to greater-than-expected technology and ad spending. The estimate before that was 11 cents.

Ameritrade expects to report more than 32,000 average daily trades and net revenue above $50 million. The company reported net revenue of $39.6 million in the previous quarter and $25.7 million in the year-ago first quarter. Trades per day averaged 24,328 in the previous quarter and 10,619 in the year-ago first quarter. The revenue growth will be offset by a one-time technology charge of $2 million and by trade-execution price adjustments of about $3 million, as the company announced previously.

E*Trade

(EGRP)

was up 3 3/8, or 10.5%, to 35 1/2 and

Charles Schwab

(SCH)

was up 1 15/16 to 53 5/8. In a Nov. 27

piece,

TheStreet.com

examined post-Thanksgiving strength among online brokers, aided by overall Internet interest.

--

Amy Olmstead

In other news:

Solectron

(SLR)

was up 3 3/4 to 80 3/4 on

last night's news that it will replace

Pennzoil

(PZL)

in the S\&P 500 after the closing bell Dec. 30. Pennzoil plans to spin off its

Pennzoil Products

group, which will then merge with

Quaker State

(KSF)

to form

Pennzoil-Quaker State

. The merged company will be added to the

S\&P MidCap 400

. The surviving company,

PennzEnergy

, will not be added to any S\&P index. Pennzoil was down 2 3/4, or 8.2%, to 30 3/4.

Suiza Foods

(SZA)

, lately up 5/8 to 45 1/2, will replace Quaker State in the MidCap index.

United Rentals

(URI) - Get Report

was up 2 13/16, or 12.6%, to 25 1/16 after agreeing to sell $300 million of preferred stock, convertible into 12 million common shares at $25 each, to

Apollo Management

.

Mobil North Sea

, a division of

Mobil

(MOB)

, has canceled a drilling contract with

R\&B Falcon

(FLC) - Get Report

.

Houston-based R\&B Falcon said in a press release late yesterday that Mobil was terminating the drilling contract on its fourth-generation semisubmersible rig Jack Bates due to "certain performance breaches relating to equipment and personnel deficiencies." Falcon said it intends to take a legal route to enforce its rights under the contract.

The Jack Bates floating rig, capable of drilling in water depths of 5,400 feet, was drilling for Mobil in the North Sea at a daily rental rate of $160,000. Under the terms of the contract, that rate would go to $196,000 in early 1999 and to $206,000 a day in early 2000. The contract was set to expire in late 2001, with Mobil having the option to extend it for two one-year terms.

Falcon officials did not return calls seeking comment. A Mobil spokesman reached in Virginia had no knowledge of the issue and referred calls to Mobil's U.K. office. A call to Mobil's London spokesman was not returned.

The contract termination has led to speculation that Mobil is simply trying to renegotiate its contract at closer to present rental rates in this drilling area, hit hard by the drop in oil prices. Daily rental rates on new contracts for rigs similar to the Jack Bates are in the $140,000 range -- and falling -- substantially below the rates negotiated by Falcon and Mobil.

Falcon shares fell on the news; FLC was down 1/2 to 7 1/4. Mobil was off 3/16 to 89 3/4.

--

Mavis Scanlon

Earnings movers

Apple

(AAPL) - Get Report

was up 1 15/16, or 5.5%, to 37 on word its iMac computer was the top-selling PC in November at both U.S. computer retail stores and through the mail, according to

PC Data

, a market research firm. Last month the iMac accounted for 7.1% of all computer unit sales and 8.2% of total U.S. computer retail revenue.

Cabletron Systems

(CS) - Get Report

was down 1, or 11.2%, to 7 15/16 after last night posting a third-quarter operating loss of 12 cents a share, 2 cents wider that the 16-analyst forecast and behind the year-ago profit of 12 cents.

Caribiner

(CWC)

was down 11/16, or 7.6%, to 8 5/16 after last night announcing a fourth-quarter loss of 29 cents a share, missing both the six-analyst prediction for a profit of 19 cents and the year-ago profit of 24 cents. The company named Christopher Sinclair president and chief executive.

Case

(CSE)

was down 1 3/8, or 6.7%, to 19 1/16 after last night saying it will take a restructuring charge of $130 million to $135 million in the fourth quarter because of facility closures and a previously announced restructuring.

Cypress Semiconductor

(CY) - Get Report

was down 1 1/16, or 10.8%, to 8 3/4 after last night saying it expects to post a fourth-quarter loss of 4 cents a share because of manufacturing problems which have been corrected. The nine-analyst forecast called for a profit of 4 cents compared with the year-ago break-even quarter.

Day Runner

(DAYR)

was down 4 1/2, or 25.2%, to 13 1/2 after last night warning it expects to post second-quarter earnings of 30 cents to 35 cents a share because of higher operating costs and lower sales. The single-analyst forecast called for 55 cents vs. the year-ago 45 cents.

Encore Wire

(WIRE) - Get Report

was down 5/8, or 7.4%, to 7 7/8 after last night saying it expects to report fourth-quarter results "significantly" below the year-ago 37 cents a share and below current estimates because of fluctuations in the price of copper and the impact of price competition for its copper wire products. The three-analyst view called for 22 cents.

Hercules

(HPC)

was down 2 7/16, or 8.5%, to 26 3/16 after last night saying it's comfortable with the lower end of analysts 1999 earnings estimates. The nine-analyst view calls for $2.49 a share in 1999 and $2.68 in 1998.

Micron Electronics

(MUEI)

, majority-owned by

Micron Technology

(MU) - Get Report

, was down 3 1/4, or 15.2%, to 18 3/16 after reporting first-quarter earnings of 12 cents a share, 1 cent above the 13-analyst estimate and higher than the year-ago penny.

Monarch Dental

(MDDS)

was down 6 3/16, or 61.1%, to 3 31/32 after last night warning it sees fourth-quarter and full-year net earnings falling below estimates because of a charge and a slowdown of operations in its Houston and Arkansas markets. Before the charge, the company expects quarter earnings of 6 cents to 12 cents a share. The 15-analyst outlook called for 18 cents vs. the year-ago 9 cents. For the year, analysts called for 58 cents compared with the year-ago 26 cents.

Northland Cranberries

(CBRYA)

was down 3, or 27.1%, to 8 1/8 after last night saying it sees 1999 earnings falling behind expectations due to heavy price discounting in the cranberry juice market. The five-analyst view called for annual earnings of 74 cents a share vs. the year-earlier 19 cents.

Park Electrochemical

(PKE) - Get Report

was up 4 1/16, or 20.6%, to 23 3/4 after this morning posting third-quarter earnings of 40 cents a share, blowing away the three-analyst forecast for 14 cents and falling behind the year-ago 56 cents.

Smart \& Final

(SMF)

was down 1 1/16, or 11%, to 8 9/16 after last night saying it expects fourth-quarter earnings to fall below forecasts because of unsatisfactory operating results from its food service distribution division, interest expense and restructuring costs. The three-analyst view called for earnings of 17 cents a share vs. the year-ago loss of 31 cents.