Stocks Mostly Lower as Internet Sector Continues to Take a Beating

The Dow is the only major index currently in the black.
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Investors continued to dump high-fliers and buy stocks in long-shunned sectors as another volatile session headed into the final hour of trading.

Meanwhile, Internet stocks built on Wednesday's big decline. However the sector has pared its losses.

The

Dow Jones Industrial Average

was up 51 to 10,462. The

S&P 500

was down 9 to 1319.

The

Nasdaq Composite Index

was down 17 to 2490, well off its worst levels of the session. Some parts of the tech sector were showing life this afternoon. The

Philadelphia Stock Exchange Semiconductor Index

was up 2%.

The

Russell 2000

was down 2 to 415.

Scott Curtis, senior equity trader at

Brown Brothers Harriman

, noted that drug, financial and tech stocks have been "carrying the ball" for the last seven or eight months and "now they're taking a breather."

TheStreet.com Internet Sector

index was down 33 to 661, while the

TheStreet.com E-Commerce Index

was down 4 to 131.

Internet stocks are taking a real beating, he said, adding that those who'd shorted the stocks are starting to recoup their losses. Traders are looking for bounces and they're not coming, he said.

As for the rotation out of in-favor stocks to out-of-favor stocks, market participants have expressed skepticism at how long it will last.

Prices for metals and other commodities have been hanging in there, notably copper, which has been doing relatively well, Curtis noted. Lumber and aluminum prices, for example, have been doing better for a while and now it's starting to show up in the stocks.

The

Philadelphia Stock Exchange Forest & Paper Products Index

, which has been on fire lately, was up 4%. The

Philadelphia Stock Exchange Gold and Silver Index

was up 7%. In the S&P 500, the basic materials group was the best-performing group in the index, followed closely behind by the energy sector.

The

Morgan Stanley Cyclical Index

was up 3%.

Also jumping today were oil-service stocks. The

Philadelphia Stock Exchange Oil Service Index

surged 7%. The

American Stock Exchange Oil & Gas Index

soared 4%.

On the

New York Stock Exchange

, advancers were beating decliners 1,673 to 1,305 on 884 million shares. On the

Nasdaq Composite Index

, losers were beating winners 2,135 to 1,871 on 1.004 billion shares.

On the NYSE, 63 issues had set new 52-week highs while 47 had touched new lows. On the Nasdaq, 99 stocks had set new lows while 54 touched new highs.

On the Big Board,

America Online

(AOL)

was most active, with 34 million shares changing hands. It was down 7 7/8, or 5%, to 143.

On the Nasdaq,

Microsoft

(MSFT) - Get Report

was most active, with 30 million shares changing hands. It was up 1 1/8 to 87 1/8.

Meanwhile, the 30-year Treasury bond was down 14/32 to 95 26/32, yielding 5.54%.

2:05 p.m.: Nasdaq Pressures Other Indices Into the Red

The market's major barometers were lower, led on the downside by the

Nasdaq Composite Index

in another volatile session.

Meanwhile, cyclicals continued to put on a strong showing as money continued to stream out of other sectors of the market and into the economically sensitive issues. The

Morgan Stanley Cyclical Index

was up 2%.

The Nasdaq Comp was down 49 to 2459.

The

Dow Jones Industrial Average

was down 19 to 10,393. The biggest loser in the Dow was financial services titan

American Express

(AXP) - Get Report

, which was off 9 3/8, or 7%, to 127 1/8.

The

S&P 500

was down 19 to 1309. The basic materials group was the best-performing sector in the index, followed closely behind by the energy arena.

Despite the downdraft in the market's leading gauges, breadth was still positive on the

New York Stock Exchange

, with advancers leading decliners 1,596 to 1,320 on 710 million shares. It was a different story on the

Nasdaq Stock Market

, where losers were beating winners 2,104 to 1,762 on 820 million shares.

The small-cap

Russell 2000

was down 5 to 413.

Internet stocks were getting pummeled.

TheStreet.com Internet Sector

index was down 53 to 641.

TheStreet.com E-Commerce Index

was down 6 to 129.

The 30-year Treasury bond was down 10/32 to 95 31/32, yielding 5.53%.

On the NYSE, 60 issues had set new 52-week highs while 40 had touched new lows. On the Nasdaq, 90 issues had set new lows while new highs totaled 51.

On the Big Board,

America Online

(AOL)

was most active, with 30 million shares changing hands. It was down 10 13/16 to 140 1/8.

On the Nasdaq,

Microsoft

(MSFT) - Get Report

was most active, with 24 million shares changing hands. It was down 1 to 85.

Sector Focus: Pharmaceuticals

Drug stocks were getting shellacked, led by sharp losses in

Pfizer

(PFE) - Get Report

. The

American Stock Exchange Pharmaceutical Index

was down 5%.

Pfizer was down 15 15/16, or 11%, to 128 11/16.

Drug titan Pfizer reported that first-quarter

Viagra

sales dropped to $193 million from $236 million in the fourth quarter. The company forecast single-digit second-quarter earnings-per-share growth, citing a strong year-ago quarter due to Viagra's launch, but said it's comfortable with analysts' full-year earnings estimates. Pfizer posted first-quarter earnings of 62 cents a share, on target with the 24-analyst

First Call

prediction and up from the year-ago 53 cents.

Elsewhere in the sector, among the notable losers:

Amgen

(AMGN) - Get Report

was down 4 3/16, or 6%, to 67 7/8;

Pharmacia & Upjohn

(PNU)

was off 4 1/16, or 7%, to 58 1/4;

Schering Plough

(SGP)

was down 3 11/16 or 7%, to 6.7 and

SmithKline Beecham

(SBH) - Get Report

was down 4 5/8, or 7%, to 65 11/16.

1:08 p.m.: Midday Musings: 'Superball' Techs Dribble Lower as Shift Toward Value Rolls On

12:06 p.m.: Rise in Cyclicals Keeps Dow Out of the Red

Cyclicals continued to keep the

Dow Jones Industrial Average

out of negative territory, while the tech-chunky

Nasdaq Composite Index

was down 2%, but off its session lows.

The Dow was up 4 to 10,416, bolstered the most lately by

3M

(MMM) - Get Report

, which was up 3 3/16 to 78 7/16.

The Nasdaq Comp was down 41 to 2466, after surrendering 2.9%

yesterday.

Meanwhile, earnings reports continue to deluge Wall Street. Recently,

Gillette

(G) - Get Report

reported first-quarter earnings of 24 cents, in line with the

First Call

16-analyst outlook. Gillette was up 5/8 to 50 15/16.

Drug titan

Pfizer

(PFE) - Get Report

posted first-quarter earnings of 62 cents a share, in line with the First Call 24-analyst estimate. Pfizer was down 7 5/8 to 137.

The

S&P 500

was down 13 to 1315.

The

Russell 2000

was down 2 to 416.

TheStreet.com Internet Sector

index was down 46 to 648.

TheStreet.com E-Commerce Index

was down 6 to 129.

Transportation stocks surged. The

Dow Jones Transportation Average

was up 1%. The biggest boosts to the average were

CNF Transportation

(CNF) - Get Report

and

Burlington Northern Sante Fe

(BNI)

.

Merrill Lynch

upgraded CNF to near-term accumulate from near-term neutral, lifting the stock 2 15/16, or 8%, to 40 3/4.

The 30-year Treasury bond was down 12/32 to 95 28/32, yielding 5.53.

On the NYSE, advancers were beating decliners 1,653 to 1,143 on 478 million shares. On the Nasdaq, losers were beating winners 1,862 to 1,717 on 585 million shares.

On the NYSE, 51 issues had set new 52-week highs while 28 had touched new lows. On the Nasdaq, 55 issues had set new lows while new highs totaled 41.

On the Big Board, most active was

America Online

(AOL)

, with 25 million shares changing hands. It was down 10 13/16, or 7%, to 140 11/16.

On the Nasdaq, most active was

Intel

(INTC) - Get Report

, with 18 million shares changing hands. It was up 9/16 to 57 9/16.

Tech Focus

The

Nasdaq 100

was down 1%, while the

Morgan Stanley High-Tech 35

was down 3%. The

Philadelphia Stock Exchange Semiconductor Index

was down 1%.

On the earnings front,

Sun Microsystems

(SUNW) - Get Report

was down 3 13/16, or 6%, to 58 3/4, ahead of its third-quarter earnings release slated for after the close. The First Call 20-analyst consensus estimate sees the company earning 35 cents a share.

TheStreet.com

wrote a preview of the company's earnings report

this morning.

Apple

(AAPL) - Get Report

was down 9/16 to 34 15/16, in the wake of its better-than-expected second-quarter earnings report which was released after the close. Apple posted earnings of 60 cents a share, 3 cents higher than the First Call 18-analyst estimate and above the year-ago 38 cents.

Advanced Micro Devices

(AMD) - Get Report

popped 1 1/8, or 8%, to 15 7/8. Yesterday, troubled AMD reported a first-quarter loss of 81 cents a share, narrower than the First Call 13-analyst estimate of a loss of 92 cents a share.

TheStreet.com

wrote about AMD in a story

last night.

11:06 a.m.: Nasdaq Leads on the Downside

A tech stock surge at the open was met with a boatload of selling as the

Nasdaq Composite Index

gave up its early gains and plunged 2%.

Meanwhile, the

Dow Jones Industrial Average

was marginally higher and again in record territory.

The Nasdaq Comp was down 40 to 2468.

As was the case yesterday, cyclicals were powering the Dow. The Dow was up 66 to 10,477. The Dow's biggest boosts were coming from

DuPont

(DD) - Get Report

,

Goodyear

(GT) - Get Report

,

International Paper

(IP) - Get Report

and

3M

(MMM) - Get Report

.

The

S&P 500

was down 8 to 1320. The small-cap

Russell 2000

was down 3 to 414.

"I think the market got a little ahead of itself," said Louis Todd, head of equities trading at

J.C. Bradford

, as most of the major indices pulled back.

Looking ahead, expiration on Friday could have an effect on the market, said Todd.

Market participants have shunned -- at least so far -- a dosage of overall positive earnings reports.

General Motors

(GM) - Get Report

, the world's largest automaker, and

Ford

(F) - Get Report

both posted better-than-expected earnings. General Motors was down 1 5/8 to 88 1/8, while Ford rose 15/16 to 63 11/16.

Internet stocks were getting buried again today after plunging

yesterday.

Todd noted that the "interbet" traders, meaning day traders that largely play Internet stocks, got hammered yesterday, tried to get some of it back early in the session, but it looks like they might get their heads handed to them again today.

TheStreet.com Internet Sector

index was down 46 to 648. Among the big losers in the index:

CMGI

(CMGI)

plunged 22 1/17, or 9%, to 223 1/2, while

RealNetworks

(RNWK) - Get Report

was down 20 3/8, or 11%, to 168 1/2.

TheStreet.com E-Commerce Index

was down 7 to 128.

The 30-year Treasury bond was down 6/32 to 96 2/32, yielding 5.52%.

Online brokers -- which have been market highfliers for some time -- were giving up some of their outsized gains, despite better-than-anticipated earnings from

AmeriTrade

(AMTD) - Get Report

and

Charles Schwab

(SCH)

. Both were down sharply, off 5% and 14%, respectively.

Shares of

Friedman Billings Ramsey Group

(FBG)

soared on news it launched

fbr.com

, which it calls "the first public online investment bank." Friedman Billings said that beginning immediately, online investors will have the chance to register to participate in all of the firm's future initial public offerings.

On the news, the Friedman Billings' stock surged 3 3/8, or 34%, to 13 3/16.

On the

New York Stock Exchange

, advancers were beating decliners 1,606 to 1,011 on 315 million shares. On the

Nasdaq Stock Market

, losers were edging winners 1,767 to 1,608 on 409 million shares.

On the NYSE, 41 issues had set new 52-week highs while 23 had touched new lows. On the Nasdaq, 39 issues had set new lows while new highs totaled 31.

On the Big Board,

America Online

(AOL)

was most active, with 19 million shares changing hands. It was down 8 13/16, or 6%, to 142 1/16.

On the Nasdaq,

Intel

(INTC) - Get Report

was most active, with 15 million shares changing hands. It was up 9/17 to 57 5/8.

10:03 a.m.: Stocks Little Changed Amid Mostly Positive Earnings Reports

Market participants digested a host of mostly positive earnings reports as the market's major averages were little changed.

The

Nasdaq Composite Index

was up 1 to 2509. The

Dow Jones Industrial Average

was up 4 to 10,416. The

S&P 500

was down 2 to 1326. The

Russell 2000

was down fractionally at 417.

TheStreet.com Internet Sector

index was down 29 to 665.

TheStreet.com E-Commerce Index

was down 1 to 134.

The 30-year Treasury bond was down 9/32 to 95 31/32, yielding 5.53%.

Most Up at Open -- NYSE

BP Amoco (BPA) , up 3 1/8 to 103 1/4

.

Most Up at Open -- Nasdaq

AmeriTrade (AMTD) - Get Report, up 10 to 158

: The online broker after the close posted second-quarter earnings of 14 cents a share, double the

First Call

six-analyst consensus and up from a penny loss a year ago.

Most Down at Open -- NYSE

Equant (ENT) - Get Report, down 6 1/16 to 88 1/4

.

Most Down at Open -- Nasdaq

Inktomi (INKT) , down 8 to 129

: The company is slated to report earnings today.

TheStreet.com

wrote a preview of the report in a story

this morning.