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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: robbie who wrote (55936)	4/7/1999 1:04:00 PM
From: rupert1	Respond to of 97611

MERRILL LYNCH "WARNING" On CPQ HWP and others. Stocks Turn Mixed As Techs Falter; Treasurys Inch Up By TERRI CULLEN INTERACTIVE JOURNAL Stocks turned mixed Wednesday, as a three-day rally in the technology sector fizzled. Treasury bonds moved higher as stocks showed signs of weakness, and the dollar rose. The Dow Jones Industrial Average was up 18 points to 9981 in midday trading. The industrials gave back 43.84 Tuesday after surging to a new high on Monday. It was the second time in two weeks that the industrials failed to stay above 10000 on the day after closing there. Gains for Alcoa helped to nudge the industrials back above 10000 earlier Tuesday, as investors embraced the aluminum giant's first-quarter earnings report. While the company's net profit slipped to 60 cents a share from 62 cents a share in the year-ago period, the results came in 6 cents a share ahead of a First Call estimates. Its shares rose 1 1/2 to 42 9/16. But in the broader market, the Standard & Poor's 500-stock index eased 0.90 to 1317 and the New York Stock Exchange Composite Index gained 0.50 to 612.80. The Nasdaq Composite Index pulled back sharply by late morning as its dominant technology sector abruptly reversed course. The composite skidded 32.60, or 1.3%, to 2530.50, after closing with its second consecutive record Tuesday, while the Morgan Stanley high-technology index shed 17.60 to 1078. After leading the market to new highs over the last three days, tech shares were swamped by a wave of profit-taking early Tuesday. Traders attributed the sell-off to a report from Merrill Lynch & Co., which said Compaq Computer and Hewlett-Packard could disappoint Wall Street with their first-quarter revenues. Compaq slipped 5/8 to 30 1/2, while Dow component H-P shed 1 11/16 to 68 5/16. Internet stocks also came under some selling pressure as investors turned cautious ahead of first-quarter figures from sector bellwether Yahoo!, due out after the close of trading. Expectations are that the Internet portal will surpass Wall Street estimates of eight cents a share. "The highs techs and the Internet stocks popped up big again this morning and then got hit by some profit-taking. That rained on the whole market," said Alfred Goldman, director of technical research at A.G. Edwards & Sons. "Then when the Dow failed to hold onto 10000 again today, that triggered some more selling." But Mr. Goldman said he thinks the tech stumble will be short-lived, with optimism about the impending first-quarter earnings season continuing to underpin the sector. "This move lower is going to be very temporary. In fact," he said, "I think we've seen already our lows for the day." Traders said the real test of the market will be whether the Dow industrials manage to rise convincingly above 10000 in the near term. Indeed, after shooting more than 50 points higher minutes after the opening bell, the industrial average slipped below 10000 by midday. Trading followed a similar pattern Tuesday, when blue-chip stocks were hit by a round of selling every time the average rose above 10000. The bond market continued to benefit from investor hesitation on Wall Street. Treasury bond prices crept higher in quiet trading amid a lack of fresh economic data or significant developments in the conflict in Yugoslavia.