Stocks Suffer Further Drop in Late Trading

The Dow ends below 9200.
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The major market averages fell sharply, paced on the downside by the

Nasdaq Composite Index

, which swooned 3%, while the

Dow Jones Industrial Average

closed below 9200.

Meanwhile, Alice Ruth, a retail analyst at

NationsBanc Montgomery Securities

, has resigned her position to spend time with her family.

The fallout from

Dell's

(DELL) - Get Report

revenues not living up to expectations weighed on tech stocks today, and the computer maker tumbled 7 1/4, or 8.2%, to 81 9/16. Dell, which reported earnings

yesterday, was most active on the

Nasdaq Stock Market

with 112 million shares traded.

Computer makers fell sharply. The

Philadelphia Stock Exchange Computer Box Maker Index

fell 5%.

The Nasdaq Comp fell 64.89 to 2248.98. Meanwhile, the

Dow Jones Industrial Average

tumbled 101.56, or 2%, to 9195.47. The Dow fell sharply from 3:15 p.m. EST to 3:30 p.m. before recovering a wee bit before resuming its fall. It did manage -- as did the other major market averages -- to close off its intraday lows.

At one point during the session, the Dow was up 68.51 to 9365.54.

The

S&P 500

fell 17.82, or 1%, to 1224.05. The

Russell 2000

tumbled 6.87, or 2%, to 389.53.

The Dow and S&P 500 did manage to get above water today, but the Nasdaq Comp and Russell 2000 did not.

Internet stocks suffered a significant contusion.

TheStreet.com Internet Sector

surrendered 12.70, or 3%, to 459.13.

TheStreet.com E-Commerce Index

drooped 3.98, or 4%, to 95.25.

The 30-year Treasury bond was up 17/32 to 99 4/32, yielding 5.310%.

On the

New York Stock Exchange

, decliners beat advancers 1,954 to 1,061 on 731 million shares. On the Nasdaq losers beat winners 2,857 to 1,190 on 901 million shares.

On the NYSE, 151 issues set new 52-week lows while 21 touched new highs. On the Nasdaq, 111 issues set new lows while new highs totaled 25.

Most active on the Big Board was

Compaq

(CPQ)

, with 15.9 million shares changing hands. It was down 2 to 40 13/16.

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

--

Suzanne Kapner contributed to this report

3:04 p.m.: Nasdaq, Russell Hit by New Wave of Selling

A wave of selling around 1:15 p.m. EST particularly sideswiped the

Nasdaq Composite Index

and the

Russell 2000

while selected areas of the market have made significant gains. However, volume overall has been less than impressive.

"It's kind of a lackluster day," said Peter Coolidge, managing director of trading at

Brean Murray Foster Securities

.

The weakness in tech today has been blamed in large part on

Dell's

(DELL) - Get Report

failure to live up to Wall Street's revenue expectations. Dell was down 7 5/8, or 9%, to 81 1/8, in the wake of its earnings report

yesterday.

The Nasdaq Comp and Russell 2000 selloff recently abated after the gauges fell to around their intraday lows. The Nasdaq Comp was down 44 to 2269. The Russell 2000 was down 4 to 392. The two gauges bounced around 2:15 p.m. EST, but then faded again.

The

Dow Jones Industrial Average

was down 7 to 9290. The

S&P 500

was down 7 to 1235.

Meanwhile, on the plus side, utilities and bank stocks have risen nicely. The

Dow Jones Utility Average

was up 2%, while the

Philadelphia Stock Exchange/KBW Bank Index

also jumped 2%.

The 30-year Treasury bond rose modestly, tacking on to the gains it enjoyed

yesterday.

In bond land today, John Manley, equity strategist at

Salomon Smith Barney

, today trimmed his recommended long-term bond weighting to 35% from 40%. He also recommended clients boost their cash weighting to 10% from 5%. The equity weighting remains at 55%.

Meanwhile, transportation stocks were shining. The Dow Jones Transportation Average was up 2%.

Internet stocks tumbled.

TheStreet.com Internet Sector

was down 7 to 465.

TheStreet.com E-Commerce Index

was down 3 to 96.

On the

New York Stock Exchange

, decliners were edging advancers 1,745 to 1,204 on 550 million shares. On the

Nasdaq Stock Market

, losers were beating winners 2,592 to 1,280 on 696 million shares.

A trend Coolidge said he's been noticing lately is that trading volume hasn't been that heavy, signaling to him that there's a lot of uncertainty in the market.

There's been a lot of the volatility, particularly in tech, over the last week and a half, and it has come on not a lot of volume, Coolidge said. That volatility has come particularly in the tech sector.

The consensus is the stock market is the place to be. However investors are having trouble jumping in at these lofty levels, he said.

On the NYSE, 126 issues had set new 52-week lows while 21 had touched new highs. On the Nasdaq, 93 issues had set new lows while new highs totaled 24.

Compaq

(CPQ)

was most active on 12 million shares. It was down 1 3/8 to 41 7/16.

On the Nasdaq, Dell was most active on volume of 98 million shares.

1:55 p.m.: Nasdaq Can't Escape Dell's Pull Lower

The interest rate-sensitive utility and bank stocks surged, while lingering disappointment over

Dell's

(DELL) - Get Report

revenue numbers from

yesterday's earnings report continued to weigh on the tech-heavy

Nasdaq Composite Index

. >

The

Dow Jones Utility Average

was up 0.2%, while the

Philadelphia Stock Exchange/KBW Bank Index

jumped 2%.

The 30-year Treasury bond was up 9/32 to 98 28/32, yielding 5.33%, after rallying sharply

yesterday.

The Nasdaq Comp was down 33 to 2281. The

Dow Jones Industrial Average

was up 18 to 9315. Dow component

General Motors

(GM) - Get Report

was leading the average higher, up 3 to 86 1/8. The

S&P 500

was down 1 to 1241. The

Russell 2000

was down 2 to 394.

TheStreet.com Internet Sector

was down 1 to 471, while

TheStreet.com E-Commerce Index

recently fell underwater and was down 2 to 97.

On the

New York Stock Exchange

, decliners were beating advancers 1,644 to 1,249 on 446 million shares. On the

Nasdaq Stock Market

losers were beating winners 2,423 to 1,342 on 572 million shares.

On the NYSE, 109 issues had set new 52-week lows while 20 had touched new highs. On the Nasdaq, 79 issues had set new lows while new highs totaled 2.

On the Big Board,

Compaq

(CPQ)

was most active on 10 million shares. It was down 1 3/16 to 41 5/8.

On the Nasdaq, Dell was most active on volume of 89 million shares. It was down 7 11/16 to 81 1/8.

Transportation stocks also surged. The

Dow Jones Transportation Average

was up 2%.

1:06 p.m.: Midday Musings: A Hunt for Bargains Stems Market's Losses

12:03 p.m.: Stocks Turn Mixed at Midday

The

Dell

(DELL) - Get Report

revenue disappointment hangover continued to weigh on the

Nasdaq Composite Index

late this morning. However the gauge was well off its worst levels of the day.

The Nasdaq Comp was down 17 to 2297. The

Dow Jones Industrial Average

was up 30 to 9327. The

S&P 500

was up 2 to 1244. The

Russell 2000

was down 1 to 395.

TheStreet.com Internet Sector

was up 7 to 479.

TheStreet.com E-Commerce Index

was down 1 to 98.

The 30-year Treasury bond was up 5/32 to 98 25/32, yielding 5.334%.

On the

New York Stock Exchange

, decliners were beating advancers 1,485 to 1,230 on 283 million shares. On the

Nasdaq Stock Market

losers were beating winners 2,121 to 1,289 on 398 million shares.

On the NYSE, 87 issues had set new 52-week lows while 13 had touched new highs. On the Nasdaq, 59 issues had set new lows while new highs totaled 17.

On the Big Board,

Compaq

(CPQ)

was most active with 8 million shares changing hands. It was down 11/168 to 41 1/8.

On the Nasdaq, Dell was most active on 76 million shares. It was down 6 7/16 to 82 3/8. Dell's intraday low is 77 3/8.

Tech Focus

In the wake of the Dell earnings report,

BancBoston Robertson Stephens

senior hardware analyst Daniel T. Niles maintained his market performer rating on Dell, urging near-term caution in the wake of yesterday's results. Dell falling short of expectations on the revenue front follows the in-line results reported last quarter, with year-to-year revenue growth slowing from 54% just six months ago to 38% currently, Niles noted.

In a report Friday, Niles wrote: "We believe Dell's finish to the quarter was soft, leading to revenues of $5.2 billion relative to our $5.5 billion expectation. During Q4, we believe that the competitive pressure intensified, especially in the corporate market." He also set a near-term price target on Dell of $80 a share.

"Though we believe that Dell's business model is still the best in the industry, we believe that growth is slowing for Dell given flattening component costs and increased direct competition," Niles wrote.

Meanwhile,

A.G. Edwards

upgraded Dell today to accumulate from maintain, while

SoundView Financial

downgraded it to strong buy from buy.

The

Philadelphia Stock Exchange Computer Box Maker Index

was down 2%.

Among some of the tech indices, the Morgan Stanley High-Tech 35 and the Nasdaq 100 were down fractionally. The

Philadelphia Stock Exchange Semiconductor

Index was up 2%.

Speaking of semiconductors,

Intel

(INTC) - Get Report

is rolling out its

Pentium III

chip today.

Meanwhile,

The Wall Street Journal

today reported that

Advanced Micro Devices

(AMD) - Get Report

is announcing this month its own chip that analysts say could match the Pentium III's performance. Intel was up 15/16 to 127 5/16, while AMD was up 1/4 to 17 5/16.

America Online

(AOL)

is in talks with

eBay

(EBAY) - Get Report

about developing a closer business relationship, including the possibility of AOL acquiring a minority stake in the online auctioneer, the

Journal

reported. AOL was up 1 3/16 to 160 11/16, while eBay surged 9 78 to 241 1/2.

10:55 a.m.: Stocks Bounce from Session Lows

After falling sharply at the open, the tech sector bounced well off its lows. However, the market's major averages are still slightly lower.

The

Nasdaq Composite Index

was down 13 to 2301. The Nasdaq Comp was pounded early on in the wake of

last night's earnings report from direct computer seller

Dell

(DELL) - Get Report

which met earnings expectations but investors were disappointed that its revenues fell short of expectations.

"It's a Dell day," said Jay Suskind, head of equity trading at

Ryan Beck

. He noted that Michael Dell, chairman and chief executive officer, is slated to be interviewed on

CNBC

at 11 a.m. EST.

"Dell has been the market leader and it obviously ran into some bumps here," Suskind said.

The

Dow Jones Industrial Average

was down 17 to 9281.

The

S&P 500

was down 2 to 1240. The

Russell 2000

was down 1 to 395.

Internet stocks were mixed.

TheStreet.com Internet Sector

was up 7 to 479.

TheStreet.com E-Commerce Index

was down 1 to 99.

The 30-year Treasury bond was up 1/32 to 98 21/32, yielding 5.344%.

Suskind said volume has been light for the last couple of days, even on the down side.

Major market averages are well off their worst levels of the day. At its intraday bottom, the Nasdaq Comp had fallen as much as 37.59 to 2276.28.

"It looks like some people are bottom fishing here," said Suskind. He said the Dow is in a trading range of about 8800 to 9400.

Looking ahead, now that earnings season is for the most part through, people are starting to look ahead in part to second-quarter earnings, he said.

On the

New York Stock Exchange

, decliners were beating advancers 1,441 to 1,058 on 178 million shares. On the

Nasdaq Stock Market

losers were beating winners 1,936 to 1,161 on 277 million shares.

On the NYSE, 70 issues had set new 52-week lows while 10 had touched new highs. On the Nasdaq, 46 issues had set new lows while new highs totaled 13.

On the Big Board,

Compaq

(CPQ)

was most active with 6 million shares changing hands. It was down 15/16 to 41 7/8.

On the Nasdaq, Dell was most active on volume of 59 million shares. It was down 5 7/8, or 7%, to 82 7/8.

10:01 a.m.: Dell Earnings Send Nasdaq Lower

Dell's

(DELL) - Get Report

failure to live up to Wall Street's revenue expectations has helped send the

Nasdaq Composite Index

down 1% in the early going.

Dell met earnings expectations when it reported quarterly results

yesterday after the market closed, but missed revenue expectations. This morning, the stock was getting crushed, last down 8 3/16, or 9%, to 80 1/2.

The Nasdaq Comp was down 28 to 2286.

The

Dow Jones Industrial Average

was down 40 to 9257. The

S&P 500

was down 7 to 1235. The

Russell 2000

was down 2 to 394.

TheStreet.com Internet Sector

was up fractionally at 472.

TheStreet.com E-Commerce Index

was down 2 to 97.

The benchmark 30-year Treasury bond was down 1/32 to 98 18/32, yielding 5.35%.

In other news,

Lucent

(LU)

set a 2-for-1 stock split. Lucent was up 1 3/16 to 99 3/16.

Most Up at Open -- NYSE

Republic New York (RNB) , up 1 5/8 to 45

.

Most Up at Open -- Nasdaq

eBay (EBAY) - Get Report, up 7 3/8 to 238 1/2

:

America Online

(AOL)

is in talks with eBay about developing a closer business relationship, including the possibility of AOL acquiring a minority stake in the online auctioneer,

The Wall Street Journal

reported.

Most Down at Open -- NYSE

Best Buy (BBY) - Get Report, down 2 5/16 to 86 1/2

.

Most Down at Open -- Nasdaq

Dell (DELL) - Get Report, down 10 1/2 to 78 1/4

.