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Dow edges toward 10,000
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March 12, 1999: 10:23 a.m. ET
Gains on the blue chip index limited by Caterpillar, technology components
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NEW YORK (CNNfn) - U.S. blue chips charged higher Friday, clawing their way ever closer to 10,000, but weakness in the technology sector put a cap on the rally, at least in early trading.
Shortly after 10 a.m. the Dow Jones industrial average was 32.29 points higher at 9,929.63. Advances led declines 1,309 to 935 as 120 million shares changed hands on the New York Stock Exchange.
The Nasdaq Composite fell 13.74 to 2,398.51. The S&P 500 index gained 4.23 to 1,301.91, moving higher into uncharted territory.
Wall Street got a boost from news producer prices fell 0.4 percent in February, compared with expectations of a 0.1 percent decline. The data confirmed a view among market players that all is well in an economy growing at a healthy pace, but generating no inflation.
"It has been a great story -- strong growth and no inflation and low interest rates, but my bet is that one area that will be a little bit of a challenge to stocks will over time be interest rates," said David Jones, chief economist at Aubrey G. Lanston.
The bond market rose, pushed higher by the PPI numbers, the lowest reading on the index since January 1998. The bellwether 30-year bond rose 11/32 of a point in price, lowering the yield to 5.53 percent.
The dollar recovered from its initial shock after the sudden resignation of German Finance Minister Oscar Lafontaine Thursday, and regained some ground against the euro. The dollar also moved slightly higher against the yen.
Oil fuels the Dow again
Oil shares once again helped the Dow industrials shorten the distance to 10,000 after ministers from the world's top oil producers agreed to output cuts to fight a world oil glut.
On the Dow, shares of Exxon (XON) rose 9/16 to 75-5/16 and Chevron (CHV) jumped 1-3/8 to 86-7/16. Exxon's merger partner, Mobil (MOB) climbed 1/8 to 94-11/16.
In the oil services sector, Schlumberger (SLB) rose 13/16 to 57-13/16.
Caterpillar digs deeper
The Dow's seemingly unstoppable ascent was limited somewhat by losses in component Caterpillar (CAT) which issued a first-quarter profit warning, saying it will miss earnings forecasts by 50 percent, shut down plants, reduce production and cut jobs. Caterpillar's stock dropped 4-1/8, or more than 8 percent, to 46-3/4.
Techs lag behind
Technology stocks, largely responsible for the bull market of 1998 and the first part of 1999, once again failed to join the rally, as investors seemed to show a newfound taste for traditional blue chip stocks like consumer oriented and cyclical issues, which thrive in the midst of a healthy economy.
Weighing down on the high-tech sector, shares of Oracle (ORCL) tumbled 7-1/2, or more than 20 percent, to 29-3/8 after late Thursday the software maker reported strong fiscal third-quarter earnings but disappointing revenue growth.
Oracle's largest rival, Microsoft (MSFT) also took a hit, shedding 1-5/16 to 160-1/8 amid expectations the company will announce a broad restructuring. Late Thursday, Microsoft told analysts its fiscal third-quarter earnings will meet expectations but revenue will suffer because of accounting adjustments related to its Office 2000 business software suite.
Elsewhere in the high-tech universe, shares of Dow component IBM (IBM) were 1 lower at 181-7/8, and fellow Dow 30 member Hewlett Packard (HWP) inched up 1/16 to 68-7/8.
Shares of Intel (INTC) rose 13/16 to 118-15/16, Cisco Systems (CSCO) slipped 5/16 to 105-3/16, and Dell Computer (DELL) fell 1/4 to 41-5/8.
Countering the weakness among techs, Internet advertiser DoubleClick (DCLK) soared 15-1/16, or more than 14 percent, to 121-1/2 after the company announced a 2-for-1 stock split.
Internet service provider Prodigy (PRGY) climbed 2-15/16 to 43-11/16 after it reported a smaller-than-expected first-quarter loss. 
-- by staff writer Malina Poshtova Zang
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