Early optimism gave way to guarded pragmatism Tuesday as the Dow Jones industrial average whittled away a 115-point gain to close up only 32 points at 10,594.99. A bit of recovery from leading Internet stocks pushed the Nasdaq up 16 points to 2,414.68.
Wall Street now casts its watchful eye on Wednesday's Consumer Price Index which will be a key indicator as the Fed gathers to determine the future of short-term interest rates later this month.
Although the market lost most of its steam in late trading, there were some significant bright spots.
Yahoo! Inc. (YHOO) shot up 6 to 125 1/4 while Amazon.com Inc. (AMZN) and America Online Inc. (AOL) added 4 1/2 and 3 3/4 a share, respectively.
CMGi Inc. (CMGI) gained 1 9/16 to 77 after announcing plans to to offer its stockholders shares in the companies it takes public. Infoseek Corp. (SEEK) rose 6 1/4 to 44 1/2 and Lycos Inc. (LCOS) moved up 6 3/16 to 76 1/4.
"We are seeing cautious buying in the Internet stocks," said Peter Coolidge, senior equity trader at Brean Murray. "Investors or traders think the stocks have traded down too quickly."
Chip stocks were buoyed by some positive comments from Merrill Lynch analyst Joseph Osha who is predicting a 15 percent jump in chip sales in 1999. Cypress Semiconductor Corp. (CY) rallied up 1 3/4 to 15 5/8.
Intel Corp. (INTC) tacked on 1 5/16 to 55 11/16 while Advanced Micro Devices Inc. (AMD) and IBM Corp. (IBM) gained 1 7/16 and 1/8 a share, respectively.
Cisco Systems Inc. (CSCO) continued its steady performance, surging up 3 3/8 to 111 3/16. 3Com Corp. (COMS) inched up 1/16 to 25 1/4 and Ascend Communications Inc. (ASND) added 11/16 to 96 3/16. Lucent Technologies Inc. (LU) picked up 1/8 to 58 7/16.
Qwest Communications International Inc. (QWST) shares managed to gain 3/4 to 34 7/8, following yesterday's plummet after it announced a hostile bid for US West (USW) and Frontier Corp.( FRO). Frontier inched up 1/4 to 57 5/8 and US West chopped off 1 7/8 to close at 56 1/8.
Oracle Corp. (ORCL) fell 1 5/16 to 25 1/8 ahead of its stellar earnings report. Microsoft Corp. (MSFT) gained 1/8 to 77 11/16 and Sun Microsystems Inc. (SUNW) slashed 15/16 to finish at 58 7/16.
Gateway Inc. (GTW) was the shining star among PC stocks, surging up 4 to 64 1/16. Dell Computer Corp. (DELL) added 1 5/16 to 34 5/8 and Compaq Computer Corp. (CPQ) fell 11/16 to 21 5/16. Apple Computer Inc. (AAPL) moved up 5/8 to 46 1/16.