Stocks Mixed as Profit-Takers Send Nasdaq Lower

N E W  Y O R K, May 29 -- Technology stocks felltoday, after a big Wall Street house cropped its earningsforecasts for network computer maker Sun Microsystems and data storage firm EMC Corporation -- reawakeningfears the soft economy will continue to hit corporateprofits.

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Blue-chip stocks, however, scraped out small gains asinvestors hunted for companies, like pharmaceuticals giantMerck & Co. and cigarette maker Philip Morris with more predictable earnings in the economic downturn.

"I would love to have a recovery in hand, but I don't thinkit's in hand yet," said Tom Sparico, managing director ofequities at broker/dealer Bengal Partners. "It's just too soon.We have to digest this slowdown process first and, ultimately, itwill lay the groundwork for a very robust recovery."

The Nasdaq Composite Index dropped 75.49 points, or3.35 percent, to end at 2,175.54. Cisco Systems,the world's No. 1 maker of gear that powers the Internet, lost$1.59 at $20.46 and led the tech-packed index lower.

The Dow Jones industrial average gained 33.77points, or 0.31 percent, at 11,039.14, after wobbling aroundthe unchanged mark much of the session. Merck climbed $1.79 to$74.39 and Philip Morris rose $1.11 to $51.64, boosting theblue-chip gauge.

The broader Standard & Poor's 500 Index lost 9.96points, or 0.78 percent, to 1,267.93. Trading was light as manyinvestors tacked on another day to their long Memorial Dayweekend.

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Sun Microsystems and EMC slumped after Goldman Sachsanalyst Laura Conigliaro lowered 2001 and 2002 earningsestimates on the companies, saying there was "no notableimprovements in the U.S." and citing a slowdown in Europe. Sunwas the second most-active traded on Nasdaq, dropping $1.80 to$18.67. EMC skidded $3.11 to $33.99.

The weak outlook made Wall Street wary of high-priced techshares ahead of the period when many companies warn theirquarterly results may not meet analysts' expectations. Thisso-called "pre-announcement season" begins in about two weeks.