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U.S. stocks fight rate fears
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July 28, 1999: 11:45 a.m. ET
Dow struggles as Greenspan speaks, but techs edge into the black
By Staff Writers Malina Poshtova Zang and Robert Scott Martin
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NEW YORK (CNNfn) - Wall Street moved in mixed directions Wednesday after technology shares overcame an early round of profit taking, but the broader market found it harder to gain momentum while Alan Greenspan was talking about the economy and interest rates.
Shortly before 11:30 a.m. ET, the Dow Jones industrial average lost 17.10 points to 10,961.94. Market breadth on the New York Stock Exchange was negative, with losers ahead of gainers by 1,532 to 1,055, as trading volume rose to 227 million shares.
The Nasdaq composite index inched up 3.06 points to 2,682.39 and the S&P 500 index edged down 1.93 to 1,360.91.
In the second leg of his semiannual Humphrey-Hawkins testimony, this time given to the Senate Banking Committee, Federal Reserve Chairman Greenspan repeated the same prepared remarks he delivered to the House Banking Committee a week earlier.
Last week's statement, in which Greenspan warned investors that the Fed remains poised to act forcefully to raise interest rates at the first sight of rising inflation, sending both stocks and bonds on a sharp downturn.
The bond market gave up ground as investors nervously awaited the question-and-answer session that would follow Greenspan's Senate comments, hoping the Fed chief's unscripted responses might contain additional insight into the future of interest rates.
Meanwhile, rate jitters overturned the slight gains bonds won following the release of a smaller-than-expected increase in durable goods orders in June. The benchmark 30-year Treasury bond fell 5/32 of a point in price, while the yield was unchanged at 6.01 percent.
The dollar eased against the yen but gained a little ground against the euro.
Earnings rule the day
Investors in the stock market kept one eye on Greenspan and the other on shares of companies releasing second-quarter earnings reports.
Internet stocks were especially vulnerable to profit disappointments. Market players battered the stock of eToys (ETYS), pushing it down 2-9/32 to 37, after late Tuesday the Internet retailer reported a much larger fiscal first quarter loss than a year earlier.
Online financial-news firm The Street.com (TSCM) also suffered a decline, falling 2 to 29-3/4 even after the financial Web site reported a smaller-than-expected second-quarter loss.
Shares of Internet service provider Mindspring (MSPG) tumbled 4-3/4, or more than 12 percent, to 35-1/2 even though its second quarter beat Wall Street forecasts by 2 cents per share.
Web-based computer retailer Egghead.com (EGGS) was one of the Net sector's few winners, as shares climbed 7/32 to 9-7/16 in response to a dramatically narrowed operating loss. The company lost 18 cents per share in the second quarter, far better than the 42 cent per-share loss investors were steeled to expect.
Offline earnings, techs chime in
Outside the Internet, the flood of earnings reports continued at the same pace, and with the same mixed results.
Shares of Dow component DuPont (DD) rose 1-1/16 to 73-3/16 on news profits at the chemical conglomerate exceeded expectations in the second quarter.
Drugstore chain CVS (CVS) also reaped the benefits of stronger-than-expected second-quarter earnings, as investors greedy for shares pushed the company's stock up 2-7/8 to 50-5/8.
However, live-entertainment promoter SFX (SFX) lost 1-1/4 to 47-13/16 after the company posted an operating loss where analysts had forecast a second-quarter profit.
Among the day's merger-related winners, shares of Mylex (MYLX), a maker of high-performance computer storage hardware and software, rallied 1-5/16, or almost 13 percent, to 11-9/16 on news IBM (IBM) is buying the company for $240 million cash.
Shares of Dow computer maker IBM crawled up 7/16 to 126-11/16, keeping time with other technological heavyweights' light gains.
Fellow blue chip Hewlett Packard (HWP) gained 9/16 to 109-13/16 and Compaq (CPQ), which is set to release its earnings during the day, edged up 1/8 to 25-1/2. Shares of leading microchip maker Intel (INTC) jumped 2-3/8 to 69-15/16.
Software publisher Microsoft (MSFT) overcame early profit taking from Tuesday's technology rally, gaining 3/16 to 89. Computer maker Dell (DELL) added 1/8 to 42-1/4, while networker Cisco (CSCO) lost 1/2 to 62-7/16. 
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