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Nervous U.S. stocks retreat
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March 3, 1999: 11:47 a.m. ET
Worried about rising bond yields and upcoming jobs data, investors exit
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NEW YORK (CNNfn) - Buying enthusiasm evaporated on Wall Street by midday Wednesday, as investors watched bond yields rise, listened to Alan Greenspan's views on Social Security reform, and abandoned what had seemed like a technology bounce-back early in the session.
Shortly before 11:30 a.m. ET the Dow Jones industrial average was 23.90 points lower at 9,273.71. Losers beat gainers 1,444 to 1,086 as 269 million shares traded on the New York Stock Exchange.
The Nasdaq Composite fell 9.97 to 2,249.06. The S&P 500 index eased 2.82 to 1,222.68. (Click here for a look at today's CNNfn market movers)
Despite a renewed show of strength in the dollar and a light supply of second-tier economic data for the day, bonds turned sharply lower by midmorning. Ignoring the day's economic news, investors opted for caution, bracing themselves for what could be a very strong February employment report Friday. The bellwether 30-year Treasury bond fell 22/32 of a point in price, pushing the yield up to 5.66 percent.
Meanwhile, Federal Reserve Chairman Alan Greenspan once again told Congress he is opposed to investing Social Security money in the stock market and his words contributed to the erosion on Wall Street.
The dollar soared against the Japanese yen overnight and remained strong in U.S. trading after Tokyo allowed a key interest rate to drift down to near zero. The dollar traded modestly higher against the euro.
Tech stocks rule the day
Technology stocks, battered Tuesday, bounced back in early trading, but turned mixed by midday.
Shares of Dow member Hewlett Packard (HWP), which Tuesday rallied after the company announced it would split itself in two, continued to attract attention, inching up 3/8 to 69. Morgan Stanley Dean Witter raised its rating of HP to "outperform" from "neutral."
Fellow blue-chip IBM (IBM) eased 9/16 to 167-3/16.
Meanwhile, chip-maker Intel (INTC), beaten hard in recent sessions after several analysts' downgrades and amid simmering suspicion about earnings in the semiconductor sector, bounced back, rising 29/32 to 110-23/32. Morgan Stanley repeated its "strong buy" rating on Intel.
Computer networking firm 3Com (COMS), however, bore the brunt of selling after late Tuesday it produced a fiscal third-quarter earnings warning. Some Wall Street experts, including Merrill Lynch, had already expressed doubts about the company's earnings growth, lowering their earnings projections even before 3Com's announcement came out. The stock shed 3-3/8, or 12.5 percent, to 23-5/8 after losing more than 12 percent Tuesday. With over 35 million shares changing hands, 3Com was the most actively traded Nasdaq issue.
In the day's other tech news, shares of made-to-order PC manufacturer Dell (DELL) eased 3/4 to 77-5/16 ahead of the company's expected announcement later in the day of a new online Dell store.
Dell's chief rival, Gateway (GTW), saw its shares gain 1/4 to 68-11/16, and Compaq (CPQ) rose 11/16 to 32-9/16.
Among the remaining blue chip high-techs , Cisco Systems (CSCO) eased 5/8 to 95-1/16 and Microsoft (MSFT) slipped 1/16 to 148-1/2. Morgan Stanley Wednesday repeated its "strong buy" rating on Cisco and its $135 a share price target for the stock.
Good chemistry?
Elsewhere in the market, a New York Times report that chemical giants DuPont (DD) and Monsanto (MTC) are in merger talks sent Monsanto's stock soaring.
Shares in the company gained 2-7/8 to 47-1/4, while DuPont, a Dow component, barely budged, rising 3/8 to 51-11/16.
In the day's other deal news, shares of women's shoe retailer Nine West (NIN) rose 5/8 to 23-7/16 following news that Jones Apparel (JNY), a women's clothing maker, is buying the company for $1.4 billion, including assumed debt. Jones' stock tumbled 2-9/16, or nearly 10 percent, to 23-3/8. The deal got mixed reviews from Wall Street. ING Baring Furman Selz repeated its "strong buy" rating on shares of Jones Apparel, but Morgan Stanley downgraded the stock to "outperform" from "strong buy." 
-- by staff writer Malina Poshtova Zang
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