(

Updated from 4:03 p.m. EDT

)

The market perked up briefly at midday but major indices lost steam by the end of the session. The

Dow Jones Industrial Average

finished the day with a loss of 8.48 points, or 0.1%, to 10,804.27 after rising more than 30 points in mid-afternoon trading. The

Nasdaq Composite Index

was more consistent in holding on to a moderate gain. The tech-laden index rose 28.49, or 0.7%, to 4274.67.

"Not bad for a summer Monday," said Bill Schneider, head of U.S. equity block trading at

UBS Warburg

adding that today's action is "very orderly, it looks kind of like a staircase.". Referring to the absence of wild points swings, Schneider said "

It used to be like this. We are kind of regressing to the mean in more normal times." He thinks the stability can be construed as a positive as it draws back some investors frightened by volatility.

Earlier, stocks flipped through the flatline, as investors took a cautious stance ahead of tomorrow's

Consumer Price Index

and

Fed Chairman

Alan Greenspan's semiannual report to Congress on the state of the economy -- the

Humphrey-Hawkins

testimony -- on Thursday.

"The day is characterized by rotation, financials have had a pretty good week and are a little ahead of themselves," said Schneider, noting that the stocks are under pressure today. On the other hand, pharmaceuticals and health care stocks were getting some relief after taking it on the chin last week. The

American Stock Exchange Pharmaceutical Index

was edging up 2.1%.

The broader

S&P 500

was up 0.52, to 1510.5 while the small-cap

Russell 2000

rose 2.55, or 0.5%, to 548.18.

Investors will understandably remain cautious ahead of the flood of earnings reports that will hit the market in the next week-and-a-half, said Jay Meagrow, vice president of trading at

McDonald

in Cleveland. "There are too many big names left to report that will move sectors. Nobody is going to jump ahead of them."

Indeed, speaking of the heavyweights, a number of Dow components will report earnings later this week. Tomorrow, chip maker

Intel

(INTC) - Get Report

, drug company

Johnson & Johnson

(JNJ) - Get Report

and manufacturing biggie,

Honeywell

(HON) - Get Report

, are all expected to report their earnings.

Other tech proxies turned in a decent performance along with the Comp.

TheStreet.com Internet Sector

, also known as the

DOT, gained 33.93, or 3.9%, to 896.4.

"The Nasdaq continues to trend higher, wants to go higher," said Scott Bleier, chief investment strategist at

Prime Charter

. "Very quietly, there are 52-week highs being made in tech stocks."

Bleier believes there's not much left to the tech run; that we're about to hit some resistance levels that even the mounting optimism for the sector will not be able to overcome.

"Some will say we're breaking out and we're going to make new highs. I doubt that," he said. Yet, Bleier admits he could be wrong on this one -- momentum is a powerful force in technology stocks and can take on a life of its own.

Deal Day

Outside of technology, a number of deals were trying to help the blue-chips overcome investors' urge to take profits.

General Mills

(GIS) - Get Report

announced it will buy

Diageo's

(DEO) - Get Report

Pillsbury food division, and energy company

AES

(AES) - Get Report

plans to buy utility company

Ipalco

(IPL)

. For more on this delicious merger, take a look at the

story out of

TheStreet.com/NYTimes.com's

joint newsroom.

Paper company

Georgia-Pacific

(TGP) - Get Report

also said today that it plans to buy

Fort James

(FJ)

.

TheStreet.com/NYTimes.com

joint newsroom wrote about the deal in a

story earlier today.

Despite a dip in oil prices, transports were weak, with the

Dow Jones Transportation Index

off 0.6%. Crude oil futures tumbled on NYMEX after OPEC's president told cartel members to prepare to lift production levels by 500,000 barrels a day.

Market Internals

Breadth was mixed on moderate volume.

New York Stock Exchange: 1,319 advancers, 1,518 decliners, 904.5 million shares. 76 new 52-week highs, 27 new lows.

Nasdaq Stock Market: 2,195 advancers, 1,875 decliners, 1.53 billion shares. 98 new highs, 45 new lows.

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Most Active Stocks

NYSE Most Actives

  • Lucent (LU) : 27.9 million shares.
  • America Online (AOL) : 18.4 million shares.
  • General Electric (RAD) - Get Report: 8.6 million shares.

Nasdaq Most Actives

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Sector Watch

Several banks -- including

FleetBoston

(FBF)

,

Northern Trust

(NTRS) - Get Report

,

Bank of America

(BAC) - Get Report

and

Bank of New York

(BKS) - Get Report

-- reported earnings today.

Investors generally liked the reports -- all but Fleet were higher in late-morning trading -- but that enthusiasm hasn't infected the rest of the sector. The

Philadelphia Stock Exchange/KBW Bank Index

lost 1.5%

Still, the sector has done well lately, posting solid gains through the month. Investors may be hanging back before tomorrow, when a slew of banks report in what has become known as -- and this actually seemed clever the first few hundred-thousand times it was said -- "Super Tuesday."

Banks' recent strength makes some objective sense. There have been some good earnings, and investors are less worried about the Fed these days. But some reckon the love for banks is misplaced.

"People running to financials now strikes me as just plain incoherent," said Doug Cliggott, equity strategist at

J.P. Morgan

. "You're either going to get good earnings and have an interest-rate overhang, or you're going to get weak growth and weak financial earnings and stop worrying about the Fed."

Forestry and paper stocks were verdant on Georgia-Pacific's plan to buy Fort James.

The Philadelphia Stock Exchange Forest & Paper Products Index

was up 2%.

Oil services stocks were getting hit after

OPEC

president

Ali Rodriguez

said cartel members will raise output before the end of July if prices do not fall. The

Philadelphia Stock Exchange Oil Service Sector Index

was down 3.6%

Tobacco stocks continued to wheeze after a Miami jury ordered on Friday that tobacco companies pay $145 billion damages in a class-action suit. The

Amex Tobacco Index

was off 2.9%.

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Bonds/Economy

Treasuries are sliding further off the highs reached last Thursday, before the release of bearish economic data on Friday. Most yields are at their highest levels in three weeks. But ahead of the next Treasury buyback, slated for Thursday, long-maturity issues, the likely target of the operation, are outperforming short-maturity ones.

With no major economic data on the calendar, the benchmark 10-year Treasury was lately down xx %.

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International

Despite the weakness in the United States, Europe's bourses put on a pretty good show.

London's

FTSE

closed up 50.1, or 0.8%, to 6525.5, helped by good strength in the technology and telecom sectors.

Across the channel, the Paris

CAC

finished up 48.89, or 0.7%, to 6619.25. Frankfurt's

Xetra Dax

was up 88.73, or 1.2%, to 7406.75 in late trading.

The euro was trading down at $0.9365.

Asian markets all closed higher overnight following a sustained rally in the U.S. last week.

With Japanese investors convinced that the

Bank of Japan

would not raise interest rates, a rally in large-cap technology shares helped the market inch higher today. The optimists were right, and the BOJ said it would keep its zero-interest-rate policy intact after the market closed. The

Nikkei 225

index closed up 143.93 to 17,286.83.

The greenback edged slightly higher against the yen in Tokyo trading to 108.18. It was recently trading at 108.135.

Hong Kong stocks, meanwhile, got a boost from a rally in telecom shares, and the

Hang Seng

index rose 248.62, or 1.4%, to 17,834.78.

Elsewhere in Asia, Taiwan's

TWSE

index closed up 67.39, or 8585.52, while Singapore's

Straits Times

index gained 28.05 for the day, or 1.4%, to 2107.94. Korean markets were closed for a national holiday.

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