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Dow takes a breather
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August 15, 2000: 5:16 p.m. ET
Blue chips which rose in August sell-off, led by Home Depot; Nasdaq steady
By Staff Writer Jake Ulick
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NEW YORK (CNNfn) - The Dow Jones industrial average fell for just the second time this month Tuesday, as investors unloaded many of the stocks that helped lift the blue-chip gauge more than 6 percent over the last 12 trading sessions.
More than two-thirds of the Dow 30 companies, seen recently as a safe place to park money, fell. The biggest decliner, Home Depot, tumbled after posting a quarterly profit that met but didn't beat Wall Street expectations. Declines spread throughout the retail sector, hitting Wal-Mart, the nation's biggest retailer. And Hewlett-Packard, which Wednesday becomes the final Dow member to posts results for the second quarter, added to the losses.
But despite the declines, several analysts saw little significance behind the losses, calling a pullback after three straight winning sessions inevitable. Trading volume remained light for a second straight day.
"I can't read much into it," said Bryan Piskorowski, market analyst at Prudential Securities.
 Meanwhile, the Nasdaq composite index ended little changed as gains in Intel and Dell Computer offset losses to Cisco Systems. Tuesday's action comes just hours ahead of the government's release of July consumer price data. Barring a major surprise, the closely watched inflation gauge isn't expected to stop the Federal Reserve, which meets in seven days, from holding borrowing costs steady.
"The Fed is doing nothing next week," Bruce Steinberg, chief economist at Merrill Lynch, told CNN's Street Sweep.
The Dow fell 109.14 points, or 1 percent, to 11,067.00, registering its second loss in 12 sessions. The Nasdaq rose 1.98 to 3,851.67 while the S&P 500 slid 7.13 to 1,485.43.
Looking ahead, Prudential's Piskorowski sees few near-term catalysts to move stocks. Earnings for the April-June period already are past. And many company pre-announcements on results for the current quarter won't come until September.
 More stocks fell than rose Tuesday. Declining issues on the New York Stock Exchange topped advancing ones 1,698 to 1,169, as trading volume reached 895 million shares. Nasdaq losers beat winners 2,133 to 1,888, as more than 1.2 billion shares changed hands.
In other markets, Treasury securities dipped. The dollar fell against the euro and yen.
Blue chips dip
For most of August, the Dow gained as money fleeing technology stocks moved into less expensive blue chips with stable earnings. But a big slide in retail issues reversed some of those gains Tuesday.
Home Depot (HD: Research, Estimates) shed 5-7/16 to 53-9/16 after reporting earnings of $838 million, or 36 cents a diluted share, for its fiscal second quarter, matching forecasts. Wal-Mart (WMT: Research, Estimates), the nation's biggest retailer, appeared to go along for the ride, sliding 1-1/8 to 51-3/4.
 Among other Dow losers, Hewlett-Packard (HWP: Research, Estimates) shed 4-1/2 to 110 one day ahead of its quarterly earnings report. The computer and printer maker is forecast to have earned 85 cents per share in its fiscal second quarter, a 30 percent gain from 65 cents per share a year earlier.
But not all tech stocks fell. Dell Computer (DELL: Research, Estimates) rose 1-3/8 to 38-1/16 and Intel (INTC: Research, Estimates) jumped 15/16 to 67-7/8, continuing a second day of gains for chip makers. Weighing on the Nasdaq, Cisco Systems (CSCO: Research, Estimates) fell 1-5/16 to 63-13/16.
In other losers, Network Appliance (NTAP: Research, Estimates) slid 5-11/16 to 85-1/16. The maker of data storage products beat Wall Street expectations, but said income including charges for the latest quarter fell to $5.0 million from $13.5 million in the year-earlier period.
But Chris Grisanti, director of research at Spears Benzak Salomon & Farrell, remains bullish, saying strong earnings will send stock higher for the remainder of the year.
"The economic underpinnings are terrific and I think the fall will lead us higher," he told CNN's Street Sweep.
More news from CNNfn.com for investors:
· Make the right moves
· IPO Focus: Broadband
· Tough times for retailers
CPI ahead
Tuesday's activity came a day before the release of July's Consumer Price Index, According to analysts surveyed by Briefing.com, the key measure of inflation is expected to have gained a scant 0.1 percent in July, well below the 0.6 percent rise in June.
Economists say a small increase should not change the view that the Federal Reserve will leave interest rates unchanged when it meets next Tuesday.
The central bank raised borrowing costs six times since June 1999. And recent data have shown that the U.S. economy may be slowing under this tighter credit, giving Fed officials little reason to keep hiking rates.
 But Donaldson Lufkin & Jenrette said central bankers in their statement will warn that they are on guard against inflation.
"The Fed will also likely, nevertheless, reiterate its fears regarding the tightness of the labor market and the possibility that the recent slowdown in demand may prove unsustainable," DLJ said in a note to clients Tuesday.
In one catalyst that could bring inflation, commodity costs have been rising. Just Tuesday, oil futures jumped to a 10-year high. Some analysts fret that the move, if sustained, could derail a record economic expansion by sparking inflation and reducing spending by businesses and consumers.
Exxon-Mobil (XOM: Research, Estimates), the world's biggest oil producer, fell 1-1/4 to 81-5/16 Tuesday.
Speaking of energy stocks, Bob Dickey, market analyst for Dain Rauscher Wessels, told CNNfn's In the Money that he's bullish on the markets and sees that sector as a good place to park money. (403K WAV) (403K AIFF) 
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