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Nasdaq falls; Dow rises
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October 16, 2000: 5:17 p.m. ET
Tech stocks trend lower, led by Intel, while Friday's blue chip winners gain
By Staff Writer Jake Ulick
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NEW YORK (CNNfn) - One session after posting its second-best gain on record, the Nasdaq composite index fell Monday on renewed concern about the strength of Intel's upcoming earnings report.
Two brokerages cast doubt about the chip maker's results, due Tuesday, giving technology investors another reason to fret that a slowing economy will bite into corporate earnings.
The Nasdaq, which surged almost 8 percent Friday, fell for the seventh time in eight sessions, bringing its losses to 19 percent on the year. Intel, down more than 50 percent from its 2000 high, dropped 11.6 percent Monday.
 The Dow Jones industrial average, meanwhile, edged higher as money continued moving into many of the stocks that rallied Friday.
J.P. Morgan and IBM, which report earnings this week, drew buyers. And Hewlett-Packard and Wal-Mart, two of Friday's big gainers, resumed their upward trend.
"Today is a momentum player's dream," said Barry Hyman, chief investment strategist at Weatherly Securities. "The market has a lot to deal with and today could have been worse."
Hyman observed that investors have been shifting out of stocks such as Intel and Microsoft, two Dow companies that powered the Nasdaq in the 90s, in search of fast-growth companies like Juniper Networks, which sells high-speed Internet routers.
He says a stock market plagued by high oil prices and negative sentiment could find comfort in the week's blitz of earnings reports, which are expected to be strong.
The Nasdaq fell 26.49 points, or 0.80 percent, to 3,290.28. The Dow gained 46.62 to 10,238.80, while the S&P 500 advanced 0.45 to 1,374.62.
In a turbulent session, the Nasdaq moved in and out of positive territory before finishing lower. Intra-day gains that fade into losses have come as investors try to divine the bottom of a market that has fallen steadily since Labor Day. Analysts who had hoped that Friday's rally marked a turning point will have to wait.
 Still, the period for companies posting financial results for the July-September period begins in earnest this week, with more than half the Dow components trotting out earnings.
"I think when we start to get strong numbers, that's when we take off again," Brian Finnerty, head of Nasdaq trading at C.E. Unterberg, told CNNfn's In the Money.
More stocks fell than rose. Declining issues on the New York Stock Exchange edged out advancing ones 1,472 to 1,406, on trading volume of 997 million shares. Nasdaq losers topped winners 2,066 to 1,930, as more than 1.7 billion shares changed hands.
In other markets, Treasury securities edged lower. The dollar rose against the yen and euro.
Some pre-earnings lift
Investors bid up several of the stocks that report profits in the days ahead. Among them, Boeing (BA: Research, Estimates) jumped $1.44 to $60.19 and IBM (IBM: Research, Estimates) gained $2.06 to $111.13.
Wal-Mart (WMT: Research, Estimates), pummeled in recent months on concerns about slowing consumer spending, jumped $2.31 to $47.31, rising for a second day.
 On the Nasdaq, Sun Microsystems (SUNW: Research, Estimates), also out with results this week, gained $3.56 to $114.56.
But Intel (INTC: Research, Estimates) fell $4.69 to $36.69, the latest in a string of losses that have come since Intel warned last month that sales will miss estimates.
In its quarterly earnings due Tuesday, analysts surveyed by earnings tracker First Call expect that Intel earned 38 cents a share, a 36 percent gain over the 28 cents a share in the year-earlier period.
But Salomon Smith Barney Monday lowered its quarterly earnings estimates for Intel to 37 cents per share. And Credit Suisse First Boston says it is cautious going into the release of the numbers.
From its high this year above $75.81, Intel has lost more than half of its value and is one of the reasons the three major indexes are lower this year.
While Microsoft (MSFT: Research, Estimates) fell to a fresh 52-week low of $50.38, Juniper Networks (JNPR: Research, Estimates), which went public in 1999, surged to a 52-week high of $243.
Earnings hopes and oil fears
Art Hogan, chief market analyst at Jefferies & Company, told CNNfn's market coverage that the onset of corporate results should lift the market. (278K WAV) (278K AIFF)
Still, Monday's earnings reports failed to lift stocks. Bank of America (BAC: Research, Estimates) shed $1.38 to $45.19 after saying it earned $2.18 billion, or $1.31 a diluted share, in the third quarter, up from $2.15 billion, or $1.23 a share, in the year-earlier period. Bank of America, which beat Wall Street forecasts by 2 cents per share, rose Friday with other financial stocks.
And Continental Airlines (CAL: Research, Estimates) advanced 19 cents to $42.69 after reporting income of $137 million, or $2.24 a diluted share, well above the $2.19 a share for the quarter expected by analysts.
In an earnings report that missed forecasts, Polaroid (PRD: Research, Estimates) slid $2.31 to $9.25 after posting profit of $18 million, or 40 cents per diluted share.
Click here for a comprehensive look at the day's earnings
In the day's biggest deal, Chevron said it agreed to buy Texaco for about $35 billion, creating the world's No. 4 oil company. Chevron (CHV: Research, Estimates) lost $2.25 to $82 and Texaco (TX: Research, Estimates) gained $3.88 to $59.
The deal comes amid some of the highest oil prices in a decade, a development that economists fear could slow the economy by raising costs for businesses and crimping the amount of money spent by consumers.
 Oil prices surged anew last week amid violence in the Middle East. Israeli and Palestinian leaders are sitting down this week with President Clinton at a summit meeting in Egypt. If the gathering brings stability, that could support a market looking for signs that the region's oil supply won't be disrupted.
Oil futures fell $1.74 to $32.39 a barrel Monday.
Friday's stock rally was an aberration, a rare gain amid six straight weeks of losses. The major stock indexes are lower on the year on concern that stock prices, which surged through March, have not downwardly adjusted for an economic slowdown.
The S&P 500, off 6.5 percent in 2000, has outperformed the Dow, which is 11 percent lower on the year.
Federal Reserve central bankers raised interest rates six times since the summer of 1999 in a bid to keep rising inflation from derailing an expansion in its record tenth year. The nation's gross domestic product, after surging late last year and early this year, is expected to grow at a more modest 3 percent-to-4 percent range in 2001.
Stock prices have fallen accordingly. 
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