NEW YORK (CNNfn) - Severe losses in the technology sector weighed heavily on the rest of Wall Street Monday, wiping out a rally among blue chip issues and leaving the Dow industrials barely in positive territory as the Nasdaq plummeted.
Shortly before 3 p.m. the Dow Jones industrial average was up 28.08 points at 10,521.97, well off its session high of 10,765.74. Gainers still outnumbered losers by a margin of 2,081 to 1,031 as 959 million shares changed hands on the New York Stock Exchange.
The Dow's failed rally was smothered by heavy selling among the index's technology components. At the same time, the technology-heavy Nasdaq Composite, which went through a lot of turmoil last week, plummeted 102.22, or 4.2 percent, to 2,381.82.
The S&P 500 index fell 18.60, or 1.5 percent, to 1,300.40. (Click here for a look at today's list of CNNfn's market movers.)
Bonds drifted higher, bolstered by the stock market's halted advance. The benchmark 30-year Treasury bond traded 13/32 of a point higher in price, yielding 5.54 percent.
The dollar crept down against the yen and continued to force the euro to new lows following weekend comments by European finance officials implying they will tolerate their nearly four-month-old currency's decline against the greenback.
Tech stocks shaky again
In stocks, technology issues, the market's laggard last week, remained under heavy pressure as investors digested news that a leading computer manufacturer is taking dramatic action to fight off slowing profit growth.
Over the weekend, the board of Compaq (CPQ), the world's largest PC maker, forced the resignation of President and Chief Executive Eckhard Pfeiffer. The shake-up came only days before the company's first-quarter earnings release and its annual shareholder meeting, and just nine days after Compaq warned its profits would amount to less than half of consensus market expectations.
Compaq shares slipped 5/8 to 23, and the company's rivals in the computer industry also headed south. Dell (DELL) lost 2-3/16 to 36-1/16 and Gateway (GTW) fell 2-5/8 to 61-9/16.
Performance was mixed among the Dow's technology components. Shares of Hewlett Packard (HWP) advanced 3/4 to 71-1/8, but IBM (IBM) tumbled 4-11/16 to 165-11/16.
Outside the big computer makers, shares of QWest Communications (QWST) were unchanged at 82 after rallying earlier in the day on news BellSouth (BLS) will invest $3.5 billion to buy a 10 percent stake in the company.
Internet shares also suffered big declines, with Yahoo! (YHOO) shedding 19-3/4 to 169-7/16, Amazon.com (AMZN) losing 34, or nearly 18 percent, to 156 and America Online (AOL) tumbling 21-3/8, or more than 15 percent, to 118-3/8.
Banks ride the wave
Strong earnings, however, once again helped financial shares surge above the rest.
Citigroup (C), the Dow component and largest U.S. financial-services conglomerate, became the latest bearer of bullish news, reporting record first-quarter profit and earnings per diluted share of $1.04, well above market projections for 87 cents a share. Citigroup's stock rallied 2-1/4 to 73-7/8.
Following in the footsteps of Citigroup, banking giant BankAmerica (BAC) also reported results that surpassed expectations, and saw its stock rise 13/16 to 73-13/16.
The news drove other banking stocks higher as well. Chase Manhattan (CMB) rallied 2-1/2 to 88-9/16. On the Dow, American Express (AXP) eased 1-9/16 to 128-5/16 but J.P. Morgan (JPM) surged 4-7/16 to 137-9/16.
Airlines fly, oil explodes
The Dow transports picked up where they left off last week, leaping 74.47 points, or more than 2 percent, to 3,603.17. Airlines, truckers and railroads were all deep in the black, with the airlines in particular extending their recent advance as investors woke up to the sector's relative bargain values.
Delta Air Lines (DAL) gained 3-5/16 to 69-5/8 and United parent UAL (UAL) jumped 2-1/4 to 53-3/4.
Trucking firm CNF Transportation (CNF) joined the party after announcing first-quarter profits of 58 cents per share, beating Wall Street estimates by 8 cents. As a result, shares leapt 2-3/16 to 42-3/16.
The transport rally flew in the face of an upturn in oil stocks, a traditionally bad sign for the fuel-dependent truckers and airlines. Morgan Stanley Dean Witter raised its outlook on crude-oil prices, bumping its 1999 price target to $16 per barrel from $13.50 and its 2000 target to $17.50 per barrel from $15.50.
Morgan Stanley also said it expects major oil stocks to edge higher, recommending investors take up heavier positions in the sector. On the Dow, driller Chevron (CHV) surged 2-15/16 to 101-13/16 and Exxon (XON) leapt 1-7/8 to 81-13/16. Oil-field-service firm Halliburton (HAL) climbed 2 to 43-3/8.
Elsewhere in the energy industry, shares of Consolidated Natural Gas (CNG) soared 4-3/8 to 56-13/16 after the fossil exploration company got a $6.7 billion buyout offer from Columbia Energy Group (CG). Columbia shares slipped 1-5/16 to 46-15/16, while shares of Dominion Resources (D), Consolidated's former preferred merger partner, climbed 1-9/16 to 39-5/8.
-- by staff writer Malina Poshtova Zang with Robert Scott Martin