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Stocks wary at the open
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June 29, 1999: 10:11 a.m. ET
Investors lock in profits as first day of Fed rate meeting begins
By Staff Writer Robert Scott Martin
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NEW YORK (CNNfn) - Wall Street shuddered in the shadow of a long-anticipated interest rate meeting Tuesday, leaving stocks adrift as investors took some money off the table to wait on the sidelines.
Shortly before 10 a.m. ET, the Dow Jones industrial average was down 14.89 points at 10,640.26. Volume remained light on the New York Stock Exchange at only 66 million shares traded, while declines nosed past advances 1,060 to 1,001.
The Nasdaq composite shed 5.03 points to 2,597.41 and the S&P 500 index eased 1.34 to 1,330.01.
Bonds drifted quietly as investors returned to the sidelines ahead of Wednesday's interest-rate announcement from the Federal Reserve. The Fed's Open Market Committee (FOMC) is meeting Tuesday and Wednesday to determine U.S. interest rate policy. While many investors now believe the FOMC will raise the funds rate slightly, few dared deepen their positions in the bond market for fear of Fed surprises, leaving the benchmark 30-year Treasury bond unchanged in price to yield 6.09 percent.
The dollar fell against the euro and retreated more sharply from the yen as speculators continued to buy into Japan's apparent economic recovery.
Tech shares mixed
On Wall Street, investors were quick to lock in profits made in Monday's rally, while the bond market's weakness robbed rate-wary stocks of upward momentum.
In the interest rate-sensitive technology sector, which would suffer reduced growth prospects from higher rates, shares of industry bellwethers were mixed as investors wavered between rate fears and encouraging corporate news.
Shares of beleaguered computer maker Compaq (CPQ) climbed 5/8 to 22-7/8 amid reports that it is close to selling its Internet assets to Web venture capital firm CMGI (CMGI). CMGI shares climbed 1-5/16 to 99, defying general weakness in the Internet sector.
Dell (DELL) lost 7/16 to 36-5/8 and Gateway (GTW) slipped 15/16 to 59-13/16, while on the Dow Hewlett Packard (HWP) eased 1-1/16 to 96-5/16.
IBM (IBM), however, edged up 3/16 to 122-3/4 after company officials refused to comment on speculation that the Dow computer heavyweight is negotiating to buy computer systems maker Sequent (SQNT). Sequent shares surged 3-3/8, or more than 24 percent, to 17-3/8.
Elsewhere in the technology sector, Intel (INTC) nosed up 11/16 to 57-11/16, but Microsoft (MSFT) eased 1/8 to 86-5/8 and Cisco Systems (CSCO) receded 11/16 to 61-1/4.
Warnings, warnings
Several companies heaped downward pressure on the stock market by warning after the closing bell Monday that investors should expect profit shortfalls ahead.
Shares of Frontier (FRO) lost 3/16 to 58-1/8 after the telecommunications provider said upcoming profits will miss the mark. The company blamed long-distance pricing pressures for its forecast of second-quarter earnings of 20-22 cents per share, while analysts had been looking forward to 28 cents.
Disk drive maker Seagate (SEG) also warned that pricing pressures and disappointing sales had caused it to revise its earnings forecast for the fiscal fourth quarter down to 32-37 cents per share. Wall Street had expected a figure of 49 cents, pushing Seagate shares down 2-11/16 to 26-15/16 in frustration.
Not even the Dow blue chips were spared the urge to confess shortfalls ahead, as Philip Morris (MO) demonstrated by admitting 1999 profits will miss the mark by 2 cents per share. Shares of the tobacco and grocery-products conglomerate fell 1-1/8 to 39-7/8.
On the bright side, Newport News (NNS) shares climbed 13/16 to 31-1/16 after the shipwright firm said its second quarter will come in a few cents per share better than expected. 
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