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Wall Street divided
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May 10, 1999: 5:15 p.m. ET
Blue chips retreat, while tech stocks found support in easing inflation fears
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NEW YORK (CNNfn) - Volatility and mixed emotions marked Wall Street's day Monday as investors cooled off toward blue chip stocks but found new interest toward recently neglected technology issues.
An easing of the market's latest inflation fears as bond yields retreated from their highs, as well as a number of rumored, reported or announced corporate mergers and alliances kept investors busy, even as trading volume remained fairly light throughout the day.
The Dow Jones industrial average finished the day off 24.34 points at 11,007.25. On the New York Stock Exchange, trading volume reached 769 million shares with advances surging ahead of declines by 1,728 to 1,288.
The Nasdaq Composite rose 22.77 points to 2,526.39, while the S&P 500 index edged down 4.70 to 1,340.30.
Alan Hoffman, stock market strategist at Value Line Asset Management, said volatility is likely to continue haunting Wall Street in the months ahead, even as the market makes its way higher toward the end of the year. (221K WAV) or (221K AIFF)
One of the day's success stories was the bond market, which ended its recent bearish streak after the Treasury Department bought about $1.1 billion inflation indexed bonds and securities maturing in 2006 and 2021. Even though investors still showed signs of interest rate jitters as they prepared to absorb this week's quarterly refinancing, the bellwether 30-year Treasury bond climbed 1/4 in price as the yield slipped back to 5.79 percent.
The dollar retreated from the euro, weakening slightly against the yen as well.
Techs hold ground
In the stock market, technology shares regained their upward momentum as investors' long-standing hunger for tech leaders outweighed waning fears that interest rates, as reflected in bond yields, could push valuations in the rich sector to their limits.
Shares of Compaq (CPQ) surged 1-1/2 to 26-1/4 as investors rallied to the PC maker's decision to streamline its distribution network to better compete with the direct-sales model of Dell and Gateway. Dell (DELL) shares climbed 2-1/16 to 42-1/4 and Gateway (GTW) jumped 2-9/16 to 66-3/4.
Among the Dow computer makers, IBM (IBM) shares advanced 1-1/2 to 218-3/4 and Hewlett Packard (HWP) gained 7/16 to 80-3/8.
Nextel (NXTL) rose 9/16 to 36-15/16 after the company reached a deal with Microsoft (MSFT) to set up an Internet portal for wireless communications devices such as pagers and cell phones. In exchange, Microsoft is buying a $600 million stake in Nextel. Microsoft shares inched up 5/8 to 79-11/16.
The Net and other deals
Internet stocks also went on the offensive, buoyed by enthusiasm over a Wall Street Journal report that USA Networks (USAI) may be ready to abandon its three-month fight to acquire Web portal Lycos (LCOS). Lycos shares surged 15-3/4, or more than 17 percent, to 105-1/4, while major shareholder CMGI (CMGI) jumped 16-11/16 to 237-15/16.
Xoom.com (XMCM) was a beneficiary of another team-up between television interests and the Internet, seeing shares soar 6-3/4 to 81-7/8 after it announced a cooperative Web venture with NBC and CNet subsidiary Snap.com. CNet (CNET) shares climbed 22-7/16 to 136-3/16, but shares of NBC owner and Dow component General Electric (GE) edged down 1-3/16 to 108-3/4.
Off the Internet, one of the day's biggest newsmakers was Texaco (TX), which fell 1-1/2 to 65-3/4 after the Wall Street Journal reported the company was in preliminary merger talks with fellow oil powerhouse Chevron (CHV) in a deal that could be worth $42 billion.
Although neither company would comment on the report, Salomon Smith Barney listed-trading director Bob Basel called the report "the biggest event for the market" for the day. Shares of Chevron, a Dow component, gained 1-3/8 to 96-1/4.
In the banking sector, British financial conglomerate HSBC Holdings, which is not traded on major U.S. stock exchanges, confirmed that it is buying Republic New York (RNB) for $10.3 billion, sending Republic shares down 1-15/16 to 68-1/16.
(Click here for a look at today's list of CNNfn's market movers.)
(Click here for a look at today's CNNfn technology stocks report.) 
-- by staff writer Malina Poshtova Zang with Robert Scott Martin
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