Stocks Slump Gently into the Long Weekend

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Stocks slunk away into the Memorial Day weekend with another light-volume session of index losses and negative breadth, leaving Wall Street uncertain whether the break will be a restorative respite or just a hiccup in a longer muddle.

The

Dow Jones Industrial Average

made a V pattern on intraday charts until about 3 p.m. EDT, peeking into positive territory, at which point it started toward making a W. The blue-chip measure never got back down to its circa-12:45 low of 9077.32, but it finished down 17.93 at 9114.44.

Caterpillar

(CAT) - Get Report

,

IBM

(IBM) - Get Report

and

American Express

(AXP) - Get Report

were the worst performers on the downside, with

General Motors

(GM) - Get Report

and

J.P. Morgan

(JPM) - Get Report

leading the gainers. Meanwhile, the broad

S&P 500

shed 4.17 to 1110.47.

High-tech stocks lagged the overall market, with the 17-member software group losing 2.4% to finish dead last among the 88 Dow Jones industry groups. The tech-infested

Nasdaq Composite Index

lost 15.99, or 0.9%, to 1805.00 and the large-cap

Nasdaq 100

stumbled 8.81, or 0.7%, to 1214.89, only seeming to recover smartly from their midmorning lows. (As noted in today's

Midday Musings, a

Nasdaq Stock Market

error in incorporating an

Ericsson

(ERIC) - Get Report

,

Cisco

(CSCO) - Get Report

and

Dell

(DELL) - Get Report

declined, with

Intel

(INTC) - Get Report

poking up just slightly. Small-caps continued to reel lower, with the

Russell 2000

down 4.20, or 0.9%, to 462.99.

Among other indices, the

Dow Jones Transportation Average

moved up 8.72 to 3390.59, the

Dow Jones Utilities Average

edged down 0.20 to 280.06 and the

American Stock Exchange Composite Index

lost 1.79 to 730.57.

For the week, the Dow industrials gained 18.44, or 0.2%; the S&P 500 gained 1.74, or 0.2%; the Nasdaq Comp fell 41.77, or 2.3%; the Russell 2000 fell 9.45, or 2%; the Dow transports fell 34.14, or 1%; the Dow utilities crept up 0.14; and the Amex Composite fell 6.52, or 0.9%. Dow theorists believe new highs in the industrials must be confirmed by highs in the transports, and that's becoming increasingly unlikely as the transports keep swirling down the drain. The transportation index is 8% short of its April 16 high of 3686.02, while the Dow 30 is just 1.1% short of its May 13 mark of 9211.84.

The pre-holiday exodus from Wall Street led to the second-lowest daily volume of the year on the

New York Stock Exchange

, and breadth stayed firmly negative on both major exchanges. NYSE decliners topped advancers by 1,777 to 1,058 on 448.2 million shares, second only to Jan. 2's 366.1 million in sluggishness. New Big Board lows led new highs by 56 to 44. On the Nasdaq, 2,503 decliners outpaced 1,737 advancers on 644 million shares. New Nasdaq lows beat new highs by 110 to 54.

"We're in this digestive phase," said Steven Goldman, market strategist at

Weeden

in Greenwich, Conn. "We're also seeing insider selling and an abundance of IPOs in the last two and half months. We're probably taking a lot of liquidity out of the market. We have rates that really haven't done much over the past few months in propelling the market forward." The bond market today did its part to support stocks in a shortened pre-holiday session, as the benchmark 30-year Treasury rose 14/32 to 103 1/32. Its yield eased to 5.91%, remaining well within the recent narrow range.

Goldman said he's adopting a more defensive posture, sensing that interest rates are likely to head higher if they do break out of their confines. "I still think there'll be upside movement occurring along the way, but a lot more time spent in this choppy sort of environment -- the tipoff being that the market does look exhausted here," he said.

But Goldman isn't among the strategists fearing the approaching second-quarter preannouncement season, in which companies expecting to report disappointing earnings will warn the Street. "In March, a period that really should have been one of concern, the market didn't really slow down," he noted. Still, he acknowledged that the market is on much weaker footing than it was during the first-quarter warning period.

Elsewhere in North American equities today, the

Toronto Stock Exchange 300

edged up 6.97 to 7725.20 and the Mexican

Bolsa

slipped 12.00 to 4648.43. For the week, the TSE 300 gained 41.18, or 0.5%, and the Bolsa fell 137.75, or 2.9%.

Friday's Company Report

By

Heather Moore
Staff Reporter

(

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

.)

Pfizer

(PFE) - Get Report

slumped 3 11/16 to 105 7/16 after the

Food and Drug Administration

announced that six men have died after taking the company's vastly popular impotence drug,

Viagra

. It's unclear whether any of the deaths were caused by the drug, the agency said.

TheStreet.com

explored mounting investor worries about the drug in a

story and noted put payoffs on the stock in an

Options Buzz.

Yesterday, Pfizer fell on news that the company was writing letters to emergency room doctors and technicians to reiterate warnings about the danger of combining Viagra with organic nitrates such as the angina drug nitroglycerin.

Mergers, acquisitions and joint ventures

After its options' volume surged most of the week,

U.S. Surgical

(USS)

rose 2 7/16, or 6.6%, to 39 3/8 on rumors

Tyco

(TYC)

will take over the company.

Amgen

(AMGN) - Get Report

jumped 3 7/8, or 6.3%, to 65 9/16 after

Business Week's

take-it-with-a-mountain-of-salt "Inside Wall Street" column said

DuPont

(DD) - Get Report

is considering buying the company. DuPont tacked on 15/16 to 82 7/16.

Earnings reports and previews

Manugistics

(MANU) - Get Report

tumbled 18 9/16, or 38.9%, to 29 1/4 after saying

last night that it expects to report a first-quarter loss. Today,

Morgan Stanley Dean Witter

lowered it to neutral from outperform. Among competitors,

I2 Technologies

(ITWO)

fell 5 7/8, or 8.2%, to 65 11/16, and

PeopleSoft

(PSFT)

fell 2 1/4, or 5.1%, to 42 1/8 on sympathy pains.

Smart Modular Technologies

(SMOD)

lowered 7 11/16, or 36.7%, to 13 7/8 after Morgan Stanley Dean Witter cut it to neutral from outperform and the company said it expects an "uncertain environment" in the coming two quarters.

Last night, Smart Modular posted on-target second-quarter earnings.

Essex

(SXC) - Get Report

sank 8 1/4, or 25.3%, to 24 3/8 after saying late

yesterday that it expects to report second-earnings 25% to 30% below expectations. Competitor

Encore Wire

(WIRE) - Get Report

dropped 6 1/8, or 16.1%, to 32 1/8.

Qad

(QADI)

gave up 1 7/16, or 10.5%, to 12 5/16 after posting a first-quarter loss

last night.

IDT

(IDTC)

slipped 2 5/8, or 7.8%, to 31 despite

last night announcing better-than-expected third-quarter earnings.

BEA Systems

(BEAS)

lost 1 1/2, or 6%, to 23 1/2 after beating analysts' first-quarter expectations

last night.

Computer Learning Centers

(CLCX)

sailed 7/8, or 5.4%, to 17 1/16 after

last night beating first-quarter earnings estimates by a nickel.

Ciena

(CIEN) - Get Report

skidded 2 13/16, or 5.4%, to 49 1/4 despite

last night reporting second-quarter earnings of 29 cents per share, 2 cents above estimates. The company also said it faces "continued uncertainty" regarding the volume of orders from major clients

WorldCom

(WCOM)

and

AT&T

(T) - Get Report

. After

Interstate/Johnson Lane

raised it to strong buy from buy, WorldCom gained 3/4 to 45 1/4. AT&T rose 5/16 to 58 15/16.

Novell

(NOVL)

dived 1/2 to 10 15/16 despite reporting second-quarter earnings late

yesterday.

Offerings and stock actions

Talbots

(TLB)

soared 2 3/8, or 9.3%, to 27 7/8 after yesterday setting a quarterly dividend of 11 cents per share.

Gentex

(GNTX) - Get Report

leapt 1 5/16 to 36 1/2 after last night setting a 2-for-1 stock split.

Analyst actions

3Dlabs

(TDDD)

plunged 2 15/16, or 24.2%, to 9 1/4 after

CIBC Oppenheimer

downgraded it to hold from strong buy.

Administaff

(ASF)

sprung 2 1/4, or 5.8%, to 41 1/4 after Morgan Stanley Dean Witter raised it to strong buy from outperform.

Sequent Computer Systems

(SQNT)

shed 1 1/16, or 5.7%, to 17 9/16 after

Lehman Brothers

lowered it to outperform from buy.

Correctional Properties Trust

(CPV)

took in 3/16 to 21 1/16 after

Prudential Securities

and

Salomon Smith Barney

both initiated coverage with buys.

Gulfstream Aerospace

(GAC)

lost 1 1/16 to 42 after Morgan Stanley Dean Witter resumed coverage with a strong buy.

Miscellany

Track Data

(TRAC)

climbed 1 1/8, or 24.3%, to 5 13/16 after reporting that more than 6,000 consumers have used the company's free Internet-based investment tool,

myTrack

, in the week since it was launched May 14.

Think New Ideas

(THNK)

plummeted 5 3/8, or 18.5%, to 23 11/16 after saying its Chairman and CEO Scott Mednick is leaving to pursue philanthropic opportunities. President and COO Ron Bloom will become CEO.

Tel-Save

(TALK)

plunged 1 1/2, or 7.5%, to 18 7/16 after

TSC

reported that two large shareholders in

Group Long Distance

(GLDI) - Get Report

-- a Florida company that resells telephone service for Tel-Save -- have accused the company of shifting millions of dollars in marketing expenses off its books to Group Long Distance. Group Long Distance closed flat at 2 7/16.

Netscape

(NSCP)

dwindled 1 9/16, or 5.9%, to 24 7/8 after

Yahoo!

(YHOO)

said it will cut most of its ties with the company. Yahoo!, which sank 2 15/16 to 114 3/8, will stop producing the

Netscape Guide by Yahoo!

and stop being a "premier provider" on Netscape's search page.

Separately,

Quigley

(QGLY)

shot up 1 3/8, or 13.8%, to 11 5/16 after agreeing to a marketing partnership with Yahoo! to sell its

Cold-Eezer Plus

cold-relief lozenge over the Internet.

Coca-Cola

(KO) - Get Report

lowered 5/8 to 78 13/16 after saying it will pay around $4 million per year to be the

National Football League's

national soft-drink sponsor.

Microsoft lost 13/16 to 85 9/16 after a federal judge combined the federal and state antitrust suits against the company and scheduled trial for Sept. 8.

Cisco fell 7/8 to 76 7/8 after saying it plans to buy additional property in the south San Francisco Bay area which could accommodate 10,000 new workers.