Following

yesterday's selling on the close, a few stocks today have taken to selling on the news. Sort of.

Despite beating second-quarter earnings estimates,

Dow Jones Industrial Average

component

Alcoa

(AA) - Get Report

was down 4%. And earnings warners

New Era of Networks

(NEON) - Get Report

and

Waste Management

(WMI)

were getting destroyed.

Hit by selling

in anticipation

of stellar quarterly earnings,

Yahoo!

(YHOO)

-- which rallied 21.3% last week and is scheduled to release second-quarter earnings after today's closing bell -- was off 4.6% at 167. While the

First Call

estimate calls for earnings of 8 cents a share, the whisper number for Yahoo! is 10 cents or 11 cents.

Over the past year or so, Yahoo!'s earnings have marked something of a near-term top for its Internet kinsfolk. If that phenomenon were to appear this time around, Yahoo! -- far from its all-time closing high of 207 -- would top the sector at a lower high. Would that be a bearish indictor for Internets?

Richard Dickson, technical analyst at

Scott & Stringfellow

in Richmond, Va., said the Yahoo! indicator won't be in effect this time around. Sure, he says, the company's earnings matter, but the dot-coms are set to fly skyward whether or not it beats its number.

Dickson, who dismissed yesterday's selloff and today's moderate negativity as understandable profit-taking, sees the overall market -- led by semiconductor equipment, networking- and communication-equipment stocks and other tech names -- moving higher. Watching

TheStreet.com Internet Sector

index, he said he sees a lot of buy signals for the sector and that after being down, momentum for Internet stocks is back up and will be for the next three to six weeks. Not today: The DOT lately was down 3% to 645.40.

"Of course, the Internets could go off into their own world -- we certainly can't discount that possibility," he said. "But if we have normal conditions, I think the Nets will move with the market with continued strength." He expects investors to continue to prefer top-tier Net names such as Yahoo! and

America Online

(AOL)

and regard lesser-known names with a lot of downside risk. "With some of these

lesser-known Internet names, we're talking about going away -- not just on vacation but forever."

Gregory Nie, chief technical analyst at

Everen Securities

in Chicago, agreed, maintaining Internet stocks will participate in what he predicts will be a broad market rally no matter what Yahoo!'s earnings are. Speaking of the stock, he said: "First of all, it's a neutral chart, not a bearish chart. It's been in a broad trading range since the beginning of the year. It's plausible

the earnings will mark a near-term Internet top if the earnings disappoint or there's some sort of management discussion, but this chart does not show that the stock is destined to fall. The technical underpinnings are decent -- strong enough to absorb a hit."

Dickson said he is a little worried about mid-August, though, when high valuations might mark a market top. He said he's been watching the dividend yield/Treasury bill yield ratio. If that ratio gets worse, he said, valuations will be in "nosebleed territory" and the perceived risk will be too high.

As for breadth, Dickson differed with those technical types calling for sustained 2-to-1 advance/decline ratios to signal a leg upward and said he's pleased with recent positive numbers. "It'd be nice to see, you know," he said about a 2-to-1 A/D ratio. "It'd also be nice to have a date with

Cindy Crawford

. ... I remember when the A/D line stunk and the market moved up despite it."

Today's market internals were negative. On the

New York Stock Exchange

, decliners led advancers 1,533 to 1,159 on 436 million shares. The downs had the ups 1,955 to 1,716 on 601.1 million shares in

Nasdaq Stock Market

activity. But new 52-week highs were outpacing new lows 52 to 36 on the Big Board and by 98 to 15 on the Nasdaq.

After falling as low as 11,097.45 and rising as high as 11,147.15, the Dow lately was down 44.64 to 11,090.48. As Alcoa served as the weakest among the gilded 30,

Caterpillar

(CAT) - Get Report

,

GE

(GE) - Get Report

and

International Paper

(IP) - Get Report

stood out on the upside.

The broader

S&P 500

was down 2.59 to 1385.53, and the small-cap

Russell 2000

was down 2.88 to 453.67.

The tech-driven

Nasdaq Composite Index

was down 11.37 to 2725.41 after an earlier intraday high of 2746.96.

Sun Microsystems

(SUNW) - Get Report

, climbing 2.5%, was notably on the upside.

The 30-year Treasury was down 16/31 to 88 22/32, yielding 6.078%. (For more on the fixed-income market, see today's early

Bond Focus.)

Wednesday's Midday Watchlist

By Thomas Lepri
Staff Reporter

Inhale deeply. That isn't the fetid streets of Manhattan you're smelling -- it's Waste Management's earnings warning. The stock was plunging 19 15/16, or 37.3%, to 33 5/8 after the company warned last night that its second-quarter earnings would be a malodorous 67 cents to 70 cents a share, missing the 14-analyst forecast for 78 cents but above the year-ago 41 cents. The company blamed lower-than-expected North American revenue, and said the revenue shortfall will hurt future quarters, too.

Trash-sector buddy

Safety-Kleen

(SK)

was joining Waste Management in the dumps, lately off 4 9/16, or 24.2%, to 14 1/4 after yesterday posting third-quarter earnings of 30 cents a share, 2 cents under the 12-analyst view and up from last year's 20 cents.

Mergers, acquisitions and joint ventures

It's

Single White Female

meets

The X-Files

for

Oneida

(OCQ)

. The housewares manufacturer was off 3 1/16, or 9.9%, to 27 13/16 after its board yesterday unanimously rejected the

third

takeover offer from rival

Libbey

(LBY) - Get Report

, this one worth about $637 million, or $37.50 a share. Oneida issued a rather spooky statement calling the bid "illusory," and said that Libbey's desire to negotiate amounts to "nothing more than efforts to obtain access to Oneida's confidential and proprietary business information."

U.S. fund-management firm

Pimco Advisors

(PA)

was up 4 1/16, or 13.7%, to 33 5/8 on a

Wall Street Journal Europe

report that German insurance colossus

Allianz

is in talks to buy all or part of the company in a deal worth as much as $5 billion. Allianz has declined to comment on the report.

RCN

(RCNC)

was up 1 3/4 at 45 3/4 after setting an alliance with

Lycos

(LCOS)

to collaborate on a number of Internet-based initiatives, including the development of high-speed content to be deployed over RCN's fiber optic network.

Earnings/revenue reports and previews

Aluminum manufacturer and Dow component Alcoa posted second-quarter earnings of 65 cents a basic share and 64 cents a diluted share, a penny above the 16-analyst consensus and up from last year's 62 cents. But no one seems to care much, as Alcoa was lately sinking 2 9/16 to 61 3/16.

HCR Manor Care

(HCR) - Get Report

was falling 4 3/8, or 17.9%, to 20 1/8 after it said last night that it expects to earn only 30 cents to 35 cents a share in its second quarter, well below the 14-analyst call for earnings of 44 cents a share, and close to last year's 32 cents. The company said the shortfall was partly due to delays in a January agreement to sell 28 assisted living residences to

Alterra Healthcare

(ALI)

for $200 million. The company said that it had yet to sell seven of those facilities.

NCI Building Systems

(NCS) - Get Report

was dropping 2 7/8, or 12.5%, to 20 1/16 after it warned yesterday that its third-quarter earnings will be 68 cents to 70 cents a share, below the seven-analyst consensus for earnings of 82 cents and up from last year's 58 cents.

Investors were getting Mesozoic on New Era of Networks today, sending the business software maker down 22, or 53.8%, to 19 after it last night warned it will report a second-quarter loss of 12 cents to 22 cents share, significantly below the nine-analyst prediction for a repeat of the year-ago profit of 12 cents.

Sterling Commerce

(SE) - Get Report

was plummeting 11 1/8, or 31.1%, to 24 5/8 after it warned that its third-quarter earnings will be 38 cents to 39 cents a share, below the 41-cent 22-analyst view.

Yahoo! was kerplunking down 8 to 167 ahead of its second-quarter earnings report, due after the close today. Yahoo! inked a broad marketing deal with U.K. pay-TV broadcaster

British Sky Broadcasting

(BSY)

. The deal covers Yahoo!'s U.K. and Ireland properties.

Analyst actions

Concur Technologies

(CNQR)

was advancing 6 3/4, to 20.3%, to 40 1/2 after

BancBoston

analyst Eric Upin raised it to strong buy from buy. Upin also set a 12-month price target of 60 for Concur.

Miscellany

barnesandnoble.com

(BNBN)

was popping 7/8, or 5.1%, to 17 15/16 on news that it opened its online music store today, celebrating the launch with -- ooh! ooh! -- a free download of

Jewel's

"Deep Water."

Cox Communications

(COX)

was moving up 1 1/2 to 38 1/16 after it said it will exchange its $2.85 billion in AT&T stock -- 50.3 million shares -- for AT&T cable TV networks with 495,000 customers. Cox said that it will also get $750 million in "other consideration, including cash" under the deal.

ADRs of

Ericsson

(ERICY)

were sliding 3 1/4, or 9.7%, to 30 1/4 on news that President and CEO Sven-Christer Nilsson resigned in the face of the board's criticism over the company's slow restructuring process.

Elan

(ELN)

was falling 2 3/8, or 8.2%, to 27 5/16 on a

Wall Street Journal

report that the

Securities and Exchange Commission

sent the Irish drug firm a comment letter in January raising questions about its accounting procedures. Elan said it expected the SEC inquiry to be resolved in the next couple weeks.

TheStreet.com

last month

explored the accounting issues at Elan.

And finally, good comedy has many layers.

J2 Communications

(JTWO)

, owner and licenser of the

National Lampoon

name, was rocketing 6 3/4, or 91.5%, to 14 1/8 after announcing yesterday the hilarious news that it will soon unveil "the official portal site for comedy on the Internet." Investor Daniel Laikin told

Dow Jones Business News

, "If you look at this company as an Internet play, it should be a $120 to $150 stock." Along with a partner, Laikin holds a 21.9% stake in the company, which has a float of less than a million shares.

As originally published this story contained an error. Please see

Corrections and Clarifications.