Internet Stocks Recover; Dow Loses Early Gain
Stocks closed mixed Tuesday, as Internet names staged a modest rebound while blue chips gained only slightly after a strong morning rally.
Trading remained subdued as investors braced for key signals on interest rates today and Thursday.
The Dow Jones industrials added 31.66 points to close at 10,594.99, although the index had been up as much as 120 points.
The Nasdaq composite gained 0.7% as Internet names rose after Monday’s plunge. But Net stocks closed below their highs for the day. America Online, for example, added $4.25 to $94.75 after trading as high as $97.63.
In the broad market, winners topped losers 16 to 14 on the New York Stock Exchange, while losers had a 21-18 edge on Nasdaq.
In the bond market, yields ended slightly higher after sliding at midday. The 30-year Treasury bond closed at 6.11% up from 6.10% Monday.
“It’s the calm before the storm,” said David Orr, economist at First Union Capital Markets.
The May consumer price index report, due today, will be closely watched for signs that inflation is gaining steam--which could cement the Federal Reserve’s widely expected move to raise short-term interest rates when it meets June 29 and 30.
On Thursday, Fed Chairman Alan Greenspan will testify before Congress specifically on monetary policy.
A 309-point drop in the Dow last week reflected Wall Street’s expectation that rates will indeed rise. But many analysts say the market hasn’t fallen more because of trust that corporate profits also will remain strong near-term.
Among Tuesday’s highlights:
* Internet names on the rebound included Yahoo, up $6 to $125.25; Inktomi, up $5.75 to $90.50; Broadcom, up $9.63 to $110.63; and DoubleClick, up $5.25 to $76.
But online brokerage Charles Schwab fell further, off $2.56 to $81.38.
* Semiconductor stocks were strong on rising expectations for better sales this year. Intel rose $1.31 to $55.69 and Advanced Micro Devices leaped $1.38 to $18.31.
* Energy stocks led blue chips as crude oil prices stayed strong. Exxon rose $1 to $82.13 and BP Amoco gained $2.31 to $113.19.
* Major utility stocks were higher in the wake of the merger deal between Dynegy and Illinova. Duke Energy rose $1.13 to $59.75 and Consolidated Edison added 88 cents to $47.94.
* Troubled telecom firm Iridium rose $1.13 to $6.50 after Motorola said it will decide in July whether to invest more money in the company.
Market Roundup, C9
