Blue chips advanced today as investors, unsure of when corporate earnings will improve, moved away from the technology sector.
The gravitation toward non-technical issues reflected Wall Street's fears that computers and hardware stocks, many of which tend to be pricier than their blue chips peers, would perform poorly in the weakening economy.
At 1 p.m., the Dow Jones industrial average rose 57.32 to 10,921.42. The Nasdaq composite index lost 44.74 to 2,615.76. The Standard & Poor's 500 index fell 1.50 to 1,347.97.
Corporate profits again were the focus. Growing evidence that the economy is slowing has made many investors uneasy, sidelining many would-be buyers.
"You're going to continue to see people cautious about the economy, questioning whether we're really going to have a quick snapback in the second half of 2001," said John Forelli, portfolio manager at Independence Investment Associates.
Although the Federal Reserve has cut interest rates twice since the new year, many investors remain reluctant to fully commit to the market -- unconvinced that earnings will improve anytime soon.
PepsiCo slipped 45 cents to $44.54 after announcing quarterly results in line with analysts' expectations.
Also, Phillips Petroleum fell $5.23 to $52.90 on news of a $7 billion deal to buy Tosco Corp., up $5.29 at $39.90.
Applied Materials, the No. 1 semiconductor-equipment maker, fell $2.50 to $46.25 and Cisco, which reports quarterly profits Tuesday, lost $1 to $34.50.
Intel declined $1 to $34.69 and other semiconductor shares fell after Lehman Brothers analyst Dan Niles said revenue growth for the semiconductor industry will continue to decline, and could even fall, by mid 2001 as profit margins slim and prices drop.
3M gained $2.22 to $110.95, Coke advanced $1.12 to $58.86, Exxon Mobil rose $1.03 to $84.02 and Merck added 36 cents to $84.33.
Eastman Chemical rose 94 cents to $48.28. The largest maker of plastics used in soda bottles, said it plans to split into two companies, separating fast-growing specialty chemicals and plastics from its commodity plastics business.
Delta Air Lines rose 67 cents to $48.06 and Continental Airlines fell $1.15 to $52.85. Continental, the fifth-largest U.S. carrier, is holding preliminary talks about buying Delta, the No. 3 U.S. airline, the Washington Post reported, citing unnamed industry sources.
Exodus Communications fell $3.16 to $20.03 after the company said it will issue 13 million shares in a secondary stock offering.