After jumping out to some impressive gains in early trading, U.S. stocks pulled back a bit Monday afternoon as the Dow Jones industrial average closed up 24 points to 10,303.39 while the Nasdaq rose 21 points to 2,761.73.
Still, most technology stocks are still too high for value investors to get involved. With the Federal Reserve Board's policy meeting coming up next week, this type of cautious trading is likely to continue through the week.
"What you have is a technical rebound. You were down 500-some-odd points last week," said Dick Stein, vice president and chief technical analyst at Noble International Investments. "The damage that has been done from a technical point of view has not finished. The problems that caused the market to go down have not been alleviated."
Internet stocks were mainly responsible for Monday's gains on the Nasdaq.
CMGI Inc. (CMGI) soared up 8 5/16 to 93 1/8 ahead of its fourth-quarter earnings report. uBid Inc. (UBID) rose 6 15/16 to 30 7/16 after Merrill Lynch called the online auctioneer's shares "undervalued" and set a $50 a share price target.
America Online Inc. (AOL) shot up 3 5/16 to 100 13/16. Excite@Home Corp. (ATHM) tacked on 2 11/32 to 38 5/16 and Lycos Inc. (LCOS) closed up 1 7/16 to 48 3/8. Infoseek Corp. (SEEK) picked up 1 3/4 to 29 3/8 but Yahoo! Inc. (YHOO) and Amazon.com Inc. (AMZN) fell 1 15/16 and 2 7/16 a share, respectively.
Internet service provider Prodigy Communications Corp. (PRGY) jumped 9/16 to 17 7/16 after announcing plans to increase its dial-up network capacity by 100 percent by the end of the year to meet subscriber growth.
Computer makers International Business Machines Corp. (NYSE: IBM) and Dell Computer Corp. (NYSE: DELL) said they plan to unveil a "multi-billion" dollar extension of their $16 billion strategic pact announced in March. Dell shares rose 3/8 to 44 1/16 while IBM fell 2 to 123.
Compaq Computer Corp. (CPQ) closed unchanged at 22 3/8. Apple Computer Inc. (AAPL) lost 3 5/8 to 61 5/16 and Gateway Inc. (GTW) moved up 1 7/16 to 44 15/16.
Intel Corp. (INTC) added 2 33/64 to 78 3/16. Microsoft Corp. (MSFT) inched up 1/2 to 91 7/16 and Oracle Corp. (ORCL) rose 1/8 to 42 5/16. Sun Microsystems Inc. (SUNW) closed up 3 3/4 to 93 15/16.
Rambus Inc. (RMBS) were roughed up, falling 12 1/16 to 59 1/16 after the chipmaker confirmed bugs in Intel's 820 chipset, also known as "Camino." Morgan Stanley Dean Witter and SG Cowen were among the investment firms downgrading the stock.
Among widely held network-equipment stocks, Cisco Systems Inc. (CSCO) fell 7/8 to 68 1/8; 3Com Corp. (COMS) hustled up 1 9/16 to 28 13/16 and Lucent Technologies Inc. (LU) also rose 1 9/16 to end at 66 5/16.