Traders Cautiously Eyeing Bounce

But few are complaining as tech stocks rebound and blue-chips follow along.
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After closing

yesterday looking like the vestiges of the Woodstock '99 festival, the

Nasdaq Composite Index

today was beginning to repair some of the damage it has suffered since closing at an all-time high on

July 16 .

The tech-laden Nasdaq Comp was lately up 54.45, or 2.1%, to 2673.74 having just surpassed its opening peak of 2672.36.

The

Nasdaq 100

was up 0.7%, while the

Morgan Stanley High-Tech 35

was up 2.5% and the

Philadelphia Stock Exchange Semiconductor Index

was up 5.4%.

Chip behemoth (and SOX component)

Intel

(INTC) - Get Report

was up 6.3% after being upgraded by

SG Cowen

. Intel was most active on the

Nasdaq Stock Market

, with 23.4 million shares changing hands.

Internet stocks were enjoying a decent rise.

TheStreet.com Internet Sector

index was up 11.42, or 2%, to 576, but off its session peak of 584.62.

Yahoo!

(YHOO)

and

CMGI

(CMGI)

were among the index's stars so far.

Meanwhile,

America Online

(AOL)

, a DOT component, was most active on the

New York Stock Exchange

, with 15.3 million shares changing hands. AOL was up modestly.

Dan Marciano, head of trading at

First Albany

, said the rise in tech and Internet stocks was a technical rebound, and he also used an old Wall Street cliche to describe the market's jump. (Hint, the description includes references to a feline and a rubber ball.)

The blue-chip

Dow Jones Industrial Average

was up 132.34, or 1.2%, to 10,995.50. Providing the biggest boost to the Dow has been

American Express

(AXP) - Get Report

, up 4.3%.

Reflecting the snap-back in tech,

Hewlett-Packard

(HWP)

was the second-biggest boost to the venerable average, up 3.3%.

The

S&P 500

was up 16.56, 1.2%, to 1364.32. The

Russell 2000

was up 2.44, or 0.6%, to 445.31.

"It's nice to see a little bit of a bounce," said Ted Bridges, vice president and money manager of

Bridges Investment Counsel

in Omaha, Neb.

Among several risks for equities going forward, Bridges cited high valuations as most paramount. Although the market leaders have been pounded, have valuations come down enough to get anything more than a bounce?, he asked. "I kind of suspect not." However, Bridges confessed that he did not know.

Forward Looking

Looking ahead,

Federal Reserve

Chairman

Alan Greenspan

is scheduled to testify before the

Senate Banking Committee

tomorrow. Greenspan is widely expected to mainly repeat testimony delivered last week before the

House Banking Committee

. However, a big unknown is what -- if anything -- will come out of the question-and-answer period with senators.

Last week the Fed chief warned the Fed won't hesitate to raise interest rates if signs of inflation emerge. That warning only intensifies the already high interest in upcoming economic data, although Marciano said he didn't hear anything different in Greenspan's testimony last week than in previous comments by the chairman.

Regardless, there are a couple of big reports coming up, including the

Employment Cost Index

for the second quarter and the advance estimate of second-quarter

gross domestic product

. Both reports are slated for release Thursday at 8:30 a.m. EDT. According to the average estimate of economists polled by

Reuters

, the ECI is projected to rise 0.8%, while GDP is predicted to increase 3.3%.

In the Treasury market, the 30-year bond was lately up 7/32 to 89 14/32, its yield dipping to 6.02%. (For more on the fixed-income market, see today's early

Bond Focus.)

On the NYSE, advancers were leading decliners 1,559 to 1,245 on 410.4 million shares. In Nasdaq trading, winners were beating losers 1,951 to 1,658 on 550 million shares.

On the NYSE, 26 issues were trading a new 52-week lows while 84 had touched new highs. On the Nasdaq, 42 issues had set new 52-week lows while new highs totaled 46.

Meanwhile, among other indices, the

Dow Jones Transportation Average

was up 1%, the

Dow Jones Utility Average

was down 0.5% and the

American Stock Exchange Composite Index

was up 0.2%.

Tuesday's Midday Watchlist

By Heather Moore
Staff Reporter

As noted above, Intel was up 3 15/16, or 6.3%, to 66 7/8 after SG Cowen raised it to buy from neutral and lifted its 1999 earnings estimate for the company to $2.33 from $2.25 a share. The firm said the chip maker will be helped in the second-half by rising sales promotions for PCs. "Higher capacity utilization will mean decent profitability, even from low-end processors," analyst Drew Peck wrote in a research note this morning.

Mergers, acquisitions and joint ventures

Cox Communications

(COX)

was down 7/8 to 37 15/16 after

The Wall Street Journal

reported the company plans to acquire the cable TV assets of

Gannett

(GCI) - Get Report

for $2.7 billion. Gannett was up 1 13/16 to 76 5/16.

Sinclair Broadcast

(SBGI) - Get Report

was up 3/8 to 17 3/4 on news it's selling 43 radio stations in nine markets to

Entercom Communications

(ETM) - Get Report

for $821.5 million in cash. Entercom was up 1 15/16, or 5.2%, to 39 1/16.

PaineWebber

downgraded Sinclair to attractive from buy, and

Morgan Stanley Dean Witter

upgraded Entercom to strong buy from outperform.

Earnings/revenue reports and previews

Advanced Fibre Communications

(AFCI)

was up 1 1/2, or 10.3%, to 16 1/8 after last night announcing second-quarter earnings that beat analyst predictions by 2 cents a share.

Avery Dennison

(AVY) - Get Report

was up 1/16 to 63 1/16 after posting second-quarter earnings of 63 cents a share, 2 cents above the seven-analyst view and higher than the year ago 55 cents. The company also said it sees double-digit earnings growth in the second half.

Covad

(COVD)

was up 3 3/4, or 7.2%, to 56 1/2 after it met analyst estimates yesterday, reporting a net loss of 61 cents a share for the second quarter. The Santa Clara, Calif.-based provider of high-speed data services posted revenue of $10.8 million, up sharply from $809,000 one year earlier. The stock has fallen 21% from 67 1/2 on July 15 as investors worry about growth prospects for Covad and its sector.

eBay

(EBAY) - Get Report

wasn't invited to breakfast today. After the online auctioneer last night posted second-quarter earnings of 4 cents a share vs. the year-ago 2 cents, the stock was off 2 13/16 to 101 5/8.

The market apparently needed a little

Insight Enterprises

(NSIT) - Get Report

before lunch, lifting the stock 3 3/8, or 10.6%, to 35 1/8 after the company posted second-quarter earnings that exceeded predictions by 4 cents a share.

Integrated Silicon Solution

(ISSI)

flexed some early muscle, jumping 3 3/16, or 10%, to 34 15/16. After training and eating its vitamins, the company beat last year's quarter by 56 cents a share with a figure that includes a charge and an extraordinary gain. The company provided no per-share operating figures.

International Network Services

(INSS)

opened big, up 3 points in the first half-hour of trading. But by lunch, the stock had given the gain back somewhat, and lately was up 2 5/8, or 6.7%, to 42 1/4. The company beat a fourth-quarter earnings prediction by a penny a share yesterday.

LifePoint Hospitals

(LPNT)

was up 3/8 to 9 13/16 after late yesterday beating a second-quarter estimate by 3 cents a share.

Gentlemen, start your engines.

Monaco Coach

(MNC)

peeled out at the bell, jumped 3 points and came in with a midday gain of 1 7/16, or 5.6%, to 26 151/16 after passing a second-quarter earnings estimate by 14 cents a share and lapping last year's quarter by 35 cents.

Remedy

(RMDY)

? Exactly. Although the company beat second-quarter predictions by a penny yesterday, by midday the company needed something to stop the bleeding. It recently was off 2 7/8, or 11.1%, to 23 1/8.

Sykes Enterprise

(SYKE) - Get Report

was up 1 to 27 7/16 after last night it matched second-quarter earnings estimates.

Waters

(WAT) - Get Report

was up 3 3/16, or 6%, to 56 5/16 after late yesterday the company drowned the analysts, and beat their second-quarter prediction by 4 cents a share.

In other earnings news:

Analyst actions

American Express was up 5 13/16 to 142 5/16 after Morgan Stanley Dean Witter started coverage with a strong buy and a price target of 175.

Dow Chemical

(DOW) - Get Report

was up 3 3/8 to 124 3/8 after PaineWebber upped the stock to neutral from unattractive. The firm also lifted

Union Carbide

(UK)

to attractive from neutral. Union Carbide was up 1 5/8 to 47 5/8. Separately,

ING Barings Furman Selz

upgraded Union Carbide to hold from sell, saying the company's earnings probably will improve in the coming months.

Hewlett-Packard was up 3 7/16 to 109 1/8 after

Salomon Smith Barney

raised its price target for the stock to 130 from 105.

Eric Gillin contributed to this report.