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Hesitation on Wall Street
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April 7, 1999: 11:50 a.m. ET
Techs reverse direction as anticipation over Yahoo! turns into dread
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NEW YORK (CNNfn) - U.S. stocks headed lower late Wednesday morning as investors came down with a case of the technology jitters ahead of a corporate earnings report from Web leader Yahoo, sending the Nasdaq into the red.
Shortly before 11:30 a.m. ET the Dow Jones industrial average was up 31.63 points at 9,995.12. Losers took the lead from gainers by a narrow margin of 1,399 to 1,223 as trading volume on the New York Stock Exchange reached 319 million shares.
The Nasdaq Composite, the broadest indicator of the performance in the technology sector, fell 27.94 points to 2,535.23, halting the upward course that took it to its second record close in a row Tuesday. The S&P 500 index was up a scant 0.87 to 1,318.76. (Click here for a look at today's list of CNNfn's market movers.)
The bond market turned mixed, bolstered by a Treasury Department debt buyback and an encouragingly hefty March layoffs report. The bellwether 30-year Treasury bond climbed 6/32 of a point in price for a yield of 5.50 percent.
The dollar made modest advances against both the yen and the euro.
Earnings ambivalence
Investors in the stock market got one of their first whiffs of the upcoming first-quarter earnings reporting season when Alcoa (AA), the world's largest aluminum producer, became the first of the Dow 30 to reveal its January-March performance..
Alcoa, whose profit per share slipped from a year earlier but came in well above market projections, saw its stock gain 1-3/8 to 42-7/16, helping encourage buying in the broader market for blue-chip stocks.
However, the enthusiasm was tempered by jitters over Yahoo! (YHOO), which is due to announce its results after the market closes. The company is the leading Internet portal and analysts say its earnings will set the tone for the technology sector in general. After a strong opening rally and a dip into negative territory, Yahoo! shares were trading up a wary 3/8 at 215-1/2.
Hugh Johnson, chief investment officer at First Albany, said some deeper hesitation was contributing to the jitters. He called the inability of the broader market to catch up to the Dow and other large cap indexes "a danger sign," and noted that rising oil prices could play a part in bringing the euphoria to its inevitable end.
Tech giants retrench
As an example of these undercurrents moving in the market, shares of technology blue chips turned sharply mixed as traders finally dipped in to take profits from the Nasdaq's recent record run.
Intel (INTC) eased 3/4 to 129-11/16 and Microsoft (MSFT) dropped 1-11/16 to 92-3/8. Dell Computer (DELL) slipped 1/8 to 46-11/16 ahead of the start of its eagerly-awaited analyst conference Wednesday, while Cisco Systems (CSCO) advanced 1-3/16 to 116-7/16.
Among the Dow techs, IBM (IBM) fell 2-13/16 to 180-3/16 and Hewlett Packard (HWP) slipped 13/16 to 69-3/16.
Sweet anticipation
In the meantime, Internet bulls eagerly awaited not only the Yahoo! earnings but confirmation of an agreement between two giant music firms to create what could be the biggest music store on the Web. According to the New York Times, Universal Music, a unit of Seagram (VO), and BMG, a unit of Germany's Bertelsmann (FBTG), are about to announce a joint venture to sell their products on the Internet. Bertelsmann isn't publicly traded in the United States, but Seagram shares climbed 3-11/16 to 58-5/8.
Investors bought into more concrete news that cable-Internet provider @Home (ATHM) is poised to make a big splash in the Japanese home-networking market, driving shares up 5-5/8 to 167-3/4.
Anticipation also pushed shares of Revlon (REV) up 2-3/4, or nearly 14 percent, to 22-3/4 after the cosmetics giant admitted it was studying the possibility of selling one or more of its businesses. Shares of Revlon rallied sharply a little over two weeks ago on speculation Anglo-Dutch consumer conglomerate Unilever (UL) might be interested in buying the company. 
-- by staff writer Malina Poshtova Zang with Robert Scott Martin
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