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Record day for Nasdaq
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July 14, 1999: 5:05 p.m. ET
Technology stocks show strength while broader market drifts along
By Staff Writers Malina Poshtova Zang and Robert Scott Martin
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NEW YORK (CNNfn) - A mixed day on Wall Street ended with a record for the Nasdaq as investors sought to buy technology stocks amid a bullish earnings outlook for the sector, but cashed in on previous gains in the broader market.
The Dow industrials ended 26.92 points lower at 11,148.10. Market breadth on the New York Stock Exchange finished positive, with gainers ahead of losers 1,525 to 1,388 on trading volume of 749 million shares.
But the technology-heavy Nasdaq composite index rallied 39.66 points, or 1.4 percent, to 2,817.89, setting a record. The S&P 500 index rose 4.61 to 1,398.17.
"I really think that for the overall market it's a bit of a grind, right now," said Liam Dalton, president of Axiom Capital Management, who said investors are rewarding companies whose earnings impress them, while taking profits in the rest of the market. (421K WAV) or (421K AIFF)
The bond market retreated to almost unchanged levels following a brief upward swing after the release of tamer-than-expected producer price index data for June. Producer prices, an indicator of inflation on the wholesale level, dropped 0.1 percent last month, compared with expectations of a 0.1 percent increase.
However, inflation-sensitive bond traders focused on the report's hints of possible higher inflation in subsequent months, leaving the bellwether 30-year Treasury bond down 2/32 of a point in price for a yield of 5.91 percent.
The dollar lost ground against the euro and retreated sharply against the yen amid signs that Japan's fledgling economic recovery may be gathering speed.
Chip profits fuel market
In the stock market, technology shares were once again in favor as investors shrugged off disappointing results from PC chip maker Intel to focus instead on the company's forecast for a bright second half of the year.
Shares of Intel (INTC) gained 2-5/8 to 68. Late Tuesday, the company reported second-quarter profit that rose sharply from a year earlier, but still fell short of market expectations. Nevertheless, Intel attracted buyers for its stock by predicting the next six months will show strong growth.
Analysts' reactions to Intel's earnings were mixed. ABN Amro downgraded the stock to "outperform" from "buy," but Salomon Smith Barney upgraded it to "buy" from "outperform." Merrill Lynch and CS First Boston both reiterated their "buy" ratings for Intel.
Meanwhile, Intel's struggling main rival, Advanced Micro Devices (AMD), rose 15/16 to 18 even amid expectations that the company will report a second-quarter loss later in the day. AMD is expected to have lost $1.26 a share in the past three months, compared with a loss of 45 cents a share in the same period a year earlier.
Rambus (RMBS) shares surged 7-5/8 to 97-9/16 ahead of the specialized chipmaker's expected earnings report after the bell Wednesday. Wall Street predicts the company will report a profit of 6 cents per diluted share, slightly below the comparable year-earlier figure of 7 cents.
Shares of Motorola (MOT), which makes semiconductors as well as wireless communications products, tumbled 1-5/8 to 94-7/8 after the company's second-quarter results and warning of a possible third-quarter charge disappointed investors.
Motorola said the third-quarter charge, if taken, would relate to its investment in the satellite communications firm Iridium (IRID), which now faces either bankruptcy, liquidation or massive restructuring. Iridium shares sank 1-7/16, or more than 17 percent, to 6-3/4 Wednesday after Motorola further detailed the situation.
Uneven day for other techs
Elsewhere in the high-tech field, shares of computer makers turned mixed as the urge to liberate some profits from the strong sector reasserted itself.
Apple Computer (AAPL), which was expected to report a quarterly profit of 64 cents a share after the closing bell, gained 2-1/4 to 55-15/16. Apple did not disappoint investors, as a continued turnaround at the once struggling company produced earnings of 69 cents a share, on an operating basis, with sales rising 11 percent to $1.56 billion. The company also said it would buy back $500 million of its stock. The stock edged up to 56 in after-hours trading.
Dell (DELL) rose 1-1/4 to 43-1/2 and Gateway (GTW) closed up 4-11/16 to 73.
On the downside, Dow computer maker IBM (IBM) gave up 5/8 to 137-1/4 and fellow blue chip Hewlett Packard (HWP) ebbed 7/8 to 108-7/16.
Among other technological bellwethers, shares of software heavyweight Microsoft (MSFT) rose 1-5/16 to 94-15/16, and networking firm Cisco Systems (CSCO) inched up 1/16 to 65-5/16.
Earnings lend direction
Technology shares were not the only segment of the stock market seeking guidance from summer-quarter profits, although investors' reactions to the earnings reports sometimes seemed a bit on the inscrutable side.
One Dow component, the forestry-products maker International Paper (IP), jumped 1-1/16 to 54-1/16 after reporting a slightly better-than-expected second-quarter profit Monday afternoon. The company earned 24 cents per share in the reporting period, narrowly besting forecasts for 23 cents.
Another Dow issue, AlliedSignal (ALD), climbed 1-1/4 to 66-1/4 after the diversified manufacturer matched expectations with second-quarter earnings of 70 cents per share.
Investors were less eager to scoop up shares of Ford (F), however, even though the automaker's quarterly profit leapt past estimates by more than 50 cents per share. Ford stock eased 9/16 to 52-15/16.
In the day's deal news, Tuesday's manic merger pace continued for Internet companies as online software retailer Egghead.com (EGGS) joined forces with electronic auctioneer Onsale.com (ONSL) for about $400 million in stock. Wall Street was unimpressed, leaving Egghead shares down 5/16 at 11-3/4, while Onsale slipped 1-1/2 to 21.
(Click here for a look at today's list of CNNfn market movers.)
(Click here for a look at today's CNNfn technology stocks report) 
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