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Choppy sailing on Wall Street
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April 6, 1999: 11:40 a.m. ET
Tech stocks hold firm, but profit taking and caution pressure broader market
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NEW YORK (CNNfn) - A morning of stormy trading left U.S. stocks broadly mixed and apprehensive Tuesday, caught between bulls inflamed by Monday's record-breaking rally and the urge to take some profits off the table.
At around 11:30 a.m. ET the Dow Jones industrial average was down 35.79 points to 9,971.54.00, having bounced back and forth across the zero line as investors struggled to consolidate their positions. Volume was heavy on the New York Stock Exchange at 269 million shares, with declines beating advances 1,531 to 1,123.
However, the Nasdaq Composite continued to conquer new territory, climbing 10.52 points to 2,570.58 after setting its twelfth record for the year Monday. The S&P 500 index slipped 2.44 points to 1,318.68, backing down from its own record peak. (Click here for a look at today's list of CNNfn's market movers.)
The bond market moved higher, helped largely by buying that started in Europe overnight. The benchmark 30-year Treasury bond traded 23/32 of a point higher in price, lowering the yield to 5.53 percent.
The dollar eased against the yen and the euro, but climbed to its highest level in a year and a half against the British pound, amid speculation that the Bank of England likely will lower interest rates later this week.
Gillette cuts into optimism
Corporate news was sparse, leading technical considerations to dominate stock trading. Shares of Gillette (G), the company famous for its razors and shaving products, sank 7-3/8, or nearly 13 percent, to 50-3/8 after the firm said late Monday first-quarter profit will fall a penny short of projections.
Following the announcement, Donaldson, Lufkin & Jenrette downgraded the stock to "market perform" from a "top pick," while Morgan Stanley Dean Witter lowered its rating of the company to "neutral" from "outperform."
Investors took Gillette's warning as a broader signal, confirming worries about the first-quarter corporate earnings outlook. Dow household products maker Procter & Gamble (PG) falling 1-3/4 to 99-1/8 and fellow household blue-chip Johnson & Johnson (JNJ) slipped 7/16 to 94-7/16.
'Insatiable' tech hunger
Despite the bad news from the razor giant, several leading technology stocks clung to their recent upward momentum, edging higher in what Cantor Fitzgerald analyst Bill Meehan called investors' "insatiable appetite" for technology.
Shares of IBM (IBM) helped moderate the Dow's downturn, climbing 1-11/16 to 185-5/8 after Big Blue introduced a new commerce-oriented Web server, billed to be the fastest of its kind. However, fellow Dow member Hewlett Packard (HWP) slid 1-1/2 to 69-15/16.
Computer maker Dell (DELL) edged up 13/16 to 44-7/8 as investors applauded the company's deepening investment in the Linux alternative operating system. The company announced Tuesday morning that it is buying a stake in Red Hat Software, which makes Linux, and will make Linux-driven computer workstations and servers available to corporate clients. Shares of Microsoft (MSFT), which owns the current de facto standard operating system Windows, firmed a minimal 1/16 to 95.
Other technology bellwethers were mixed, with Compaq (CPQ) shares down 13/16 to 30-3/4, while Intel (INTC) climbed 2-3/16 to 129-11/16 and Cisco (CSCO) advanced 1-5/16 to 115-3/4.
Corporate consolidations lend heat
Reports of several deals, completed or in the works, helped generate interest in the stocks of the companies involved in them.
Among the newsmakers, shares of Nextel (NXTL) climbed 1/2 to 40-1/8 after the Wall Street Journal reported that telecommunications giant MCI WorldCom (WCOM) is in preliminary talks about a possible takeover of the company. Shares of MCI WorldCom lost 3-1/8 to 89-3/8.
In the day's other deals, shares of online broker E*Trade (EGRP) rose 4-5/16 to 76-15/16 on news the company has formed an alliance with financial-market information provider Reuters (RTRSY), making Reuters the main provider of news and market data for E*Trade Web sites worldwide. American depositary receipts of Reuters gained 2-11/16 to 91-9/16. 
-- by staff writer Malina Poshtova Zang with Robert Scott Martin
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