Big-name technology shares rallied Monday as portfolio managers began sprucing up for quarterly shareholder reports, but other blue chips struggled after a summit on the Asian financial crisis proved disappointing.
The Dow Jones industrial average slipped 1.74 points to 8,711.13 after retreating from a 50-point midday gain.
But the technology-heavy Nasdaq composite index jumped 24.53 points, or 1.4%, to 1,805.82. Most other broad-market indexes also closed higher, though they weren't as strong as the Nasdaq.
Shares of Intel, plagued by investor worries about the computer industry's heavy exposure in Asia, surged $3.88 to $73.88 to lead the Nasdaq advance, even though there were no positive developments for the sector or the chip maker.
Likewise, IBM rose $2 to $108.13, the Dow's biggest gainer. Among other leading Nasdaq technology names, Dell Computer jumped $3.13 to $87.88 and Microsoft rose $1.13 to $95.81.
"It's very typical toward the end of every quarter. You get a flight to safety in big names, a flight to liquidity in big names," said Larry Rice, chief investment officer at Josephthal & Co.
That search for quality didn't necessarily extend to other blue chips, however, as the Dow showed. Winners edged losers by just 15 to 14 on the New York Stock Exchange, while losers had a small edge on Nasdaq. Trading volume plunged from last week's levels.
Still, Wall Street was largely able to shrug off a setback for the Japanese yen, which last week began recovering from an eight-year low thanks to a U.S.-led effort to stabilize the battered Japanese currency.
The yen fell Monday after a weekend meeting of officials from around the world, including Deputy U.S. Treasury Secretary Lawrence Summers, produced no concrete plan from Japan to pull itself out of recession.
"The finance minister said they won't even begin to have a plan until after the elections in mid-July," said Art Cashin, PaineWebber Inc.'s director of floor operations at the NYSE. "That's going to have an effect on the currency markets, so I don't think we're out of the woods yet."
The dollar rose as high as 138.79 yen Monday, from 137.02 yen late Friday in New York, and was at 138.16 in late trading.
The dollar also rose to 1.7923 German marks from 1.7887 on Friday on speculation Russia may devalue the ruble. A weaker ruble would make it more difficult for Russia to repay debts to Germany, its largest creditor.
Some analysts had hoped Japan would use the meeting in Tokyo to build on last week's momentum with initiatives to clean up a bad debt problem and stimulate new business.
Market sentiment on Japan's recovery prospects improved last week after a rare U.S. move into the currency market to buy yen with dollars.
But on Monday Asian stock market indexes were broadly lower again, led by Hong Kong, which sank 4.5%, and Singapore, which lost 2.2%. Tokyo edged up 0.3%.
Some traders worry that the U.S. stock market's recovery will be short-lived if Asia's economic problems worsen, darkening the outlook for U.S. corporate profits.
The Nasdaq index gained 2.1% last week, while the Dow fell 1.4%.
In the U.S. bond market Monday, yields closed mostly unchanged, as a midday rally faded after oil prices jumped on speculation about possible new production cuts by the Organization of Petroleum Exporting Countries.
Among Monday's market highlights:
* The rally in key tech stocks drove the Morgan Stanley high-tech index up 2.3%.
A glut of personal computers is over, and demand for semiconductors is likely to pick up soon, some analysts say. "Business will pick up in the second half of the year, and Intel will be one of the prime beneficiaries," said analyst Mark Edelstone at Morgan Stanley, Dean Witter, Discover & Co.
"We think Intel is extremely attractive, and have actually moved it from the growth category in our portfolio to the value category," said Marshall Front, managing director at Trees Front Associates, which invests $1.3 billion. "I suspect that a year from now the stock will be up 50% to 75%."
* General Re soared $39.25 to $259.50 on Friday's report that Berkshire Hathaway will pay $21.4 billion, or $271.25 a share, in stock for General Re, the largest U.S. reinsurance company. The price represents a 23% premium to General Re's closing price Friday.
Some traders saw the deal by Warren Buffett, Berkshire's chief, as a sign that at least some stocks remain bargains.
Other insurance stocks also were boosted, including Unitrin, up $1.56 to $68.06; Chubb, up $1.44 to $76.19; and SCOR, up $3 to $62.63.
* Oil-related stocks rose with crude prices. Halliburton jumped $1.38 to $43.88; Texaco rose $1.31 to $60.69.
* Broderbund Software surged $2.25 to $18.75 after it agreed to be acquired by Learning Co. for $420 million, or $20 a share.
* Cincinnati Milacron, a maker of machine tools, fell 56 cents to $25.69 after warning that second-half sales and earnings would be lower than analysts expected because of the effect of the Asian crisis on its domestic customers as well as a strike that has shut down most of General Motors.
* Sunbeam slumped $2.44 to $8.81 on investor concern that a Securities and Exchange Commission investigation will turn up irregularities in accounting at the troubled appliance maker. Sunbeam shares have fallen more than 80% since reaching $53 on March 4. The company's board fired Chairman Albert Dunlap on June 13.
Market Roundup, D14