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U.S. stocks have mixed day
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February 8, 1999: 5:20 p.m. ET
Techs recover from last week's beating, blue chips post more losses
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NEW YORK (CNNfn) - A bounce-back among blue-chip technology stocks helped the Nasdaq rally Monday, even as the Dow industrials spent most of the day, and finished, in negative territory.
After a strong start to the day, U.S. stock markets reversed direction amid speculation that last week's pullback is still not finished and that valuations in many market sectors, especially technology and Internet stocks, remain high.
Adding to the nervous tone of the market, Ralph Acampora, Prudential Securities' chief technical analyst, issued a report saying a 5 to 10 percent stock market correction could be in the offing.
And Morgan Stanley Dean Witter's U.S. equity strategist Peter Canelo reiterated his concerns that a potential correction could take the Dow down to 8,700-8,800 in the near term.
The Dow Jones industrial average closed 13.13 points off at 9,291.11. Market breadth on the New York Stock Exchange was negative, with losers beating gainers 1,565 to 1,400 on trading volume of 709 million shares.
The Nasdaq Composite, which rallied in the first half-hour of trading and then had a brief foray in the minus column, finished 31.30 points, or 1.32 percent, higher at 2,404.92. The S&P 500 index rose 4.37 to 1,243.77.
Vince Farrell, chief investment officer at Spears, Benzak, Salomon & Farrell said investors may be starting to broaden their stock market horizons and may be getting ready to abandon high-priced blue chips in favor of better value elsewhere in the market -- all while creating extreme volatility on Wall Street (207K WAV) or (207K AIFF)
The bond market finished nearly flat after erasing its gains from earlier in the day. The benchmark 30-year Treasury bond was unchanged in price for a yield of 5.35 percent.
The dollar rose sharply against the Japanese yen but eased against the euro.
Revival of the techs
Bargain hunting after last week's bloodshed and the announcement and anticipated announcement of deals, reorganizations and price cuts by major technology companies dictated trading in the stock market, but failed to inspire a broad recovery in the sector that took a heavy beating in the last two days of last week. Although many major technology blue chips posted gains, other issues and a number of Internet stocks extended last week's losses.
A double upgrade by Merrill Lynch and Morgan Stanley of semiconductor equipment makers helped that corner of the high-tech sector keep afloat.
Leading the league of newsmakers, shares of Microsoft (MSFT) rallied 5-1/4 to 165-1/4 as the world's premier software maker launched a major reorganization that would establish four broad, customer-oriented divisions of the company.
Separately, Microsoft entered into an alliance with British Telecom (BTY) to develop a wireless Internet and corporate data business outside the United States. American depositary receipts of British Telecom rose 1-1/2 to 153-3/16.
Microsoft and BT were hardly the only ones looking to bring cyberspace to consumers via wireless systems. Shares of Cisco Systems (CSCO) inched up 11/16 to 101-15/16 following news the company has teamed up with Motorola (MOT) to develop an Internet-based wireless platform that will carry data, video and voice communications over cellular networks. Motorola's stock gained 1-7/8 to 68-5/16.
And the stock of Nextel Communications (NXTL) rose 1-25/32 to 32-1/16 on news the company is joining forces with Netscape Communications (NSCP), also in an effort to offer wireless Internet communications. Netscape's stock fell 1-1/2 to 67-15/16.
Elsewhere among technology stocks, the world's No. 1 computer-chip maker Intel (INTC) saw its stock rise 4-7/16 to 132. As had been widely expected, Intel on Monday announced it was cutting prices of its Celeron line of chips by as much as 24 percent, as it faces aggressive competition from rival Advanced Micro Devices (AMD). AMD's stock, which suffered heavy declines last week after the company warned it could take a first-quarter operating loss, as it too battles competition, inched up 5/16 to 17-1/8. AMD quickly matched Intel's move, lowering prices of its K6-2 chips by up to 24 percent as well.
In the day's other deals, Computer Management Sciences (CMSX) rallied 4-1/16, or more than 17 percent, to 27-9/16 on news the company has agreed to be bought by Computer Associates (CA) for $435 million in cash. Computer Associates eased 7/16 to 45-7/8.
Shares of specialty insurance firm Executive Risk (ER) soared 21-1/8, or more than 48 percent, to 65-1/8 on news insurance giant Chubb (CB) is buying the company for about $850 million in stock. Chubb's shares fell 2-5/8 to 55-7/16.
Finally, airline shares suffered a retreat, led by American Airlines parent AMR (AMR),which sank 2-15/16 to 57. American canceled at least 360 flights Monday on top of hundreds canceled over the weekend as the airline faces discontent from its pilots over its merger with Reno Air and the integration of Reno Air pilots into American's ranks. Delta Air Lines (DAL) slipped 1-5/8 to 55-15/16 and United Air Lines (UAL) shed 3/8 to 63-15/16. The Dow transports index lost 38.41, or 1.18 percent, to 3,209.25.
Limiting the index's losses, shares of Federal Express (FDX) climbed 3/4 to 83-5/16 after the express carrier said it would hike its U.S. shipping rates starting March 15.
(Click here for a look at today's CNNfn market movers)
(Click here for a look at today's CNNfn technology stocks report) 
-- by staff writer Malina Poshtova Zang
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