Russell Index Inches Up as Dow Plummets

Smaller technology, telecom and biotech stocks continued to blaze their own personal bull market on Friday, as money poured out of blue chips.

The Russell 2,000 index of smaller stocks rose 2.70 points, or 0.5%, to 556.74, even as the Dow Jones industrials sank 230.51 points to 9,862.12.

The Russell index, which is up 10.3% so far this year, now is only modestly trailing the big-tech-stock-dominated Nasdaq composite, which is up 12.8% after easing 0.6% on Friday.

Although many analysts have decried the split personality of the market, with the Dow sinking while Nasdaq surges, the advance among smaller stocks has been surprisingly broad--at least within such significant sectors as tech, telecom and biotech.

On Friday, for example, falling stocks outnumbered winners by a 3 to 2 margin on the New York Stock Exchange. But on Nasdaq, losers had just a 21-to-19 edge, indicating widespread gains among Nasdaq names.

In fact, 302 Nasdaq stocks set new 52-week highs on Friday, while on the NYSE just 55 set new highs.

Experts note that as investors sell large blue chips, it takes relatively few of those dollars to boost a single small stock. Thus, heavy selling in a few dozen blue chips can potentially drive up scores of smaller stocks, if money is shifted in that direction.

For the week, the Dow dropped 3.5% and the S&P; eased 1%, but the Nasdaq rose 0.9% and the Russell index rose 2%.

In the bond market Friday, investors sought the higher yields of shorter-term notes, driving the 2-year Treasury note yield down to 6.42% from 6.52% Thursday. The benchmark 30-year T-bond inched up slightly, to 6.15%.

Among the market highlights:

* Sliding Dow members included American Express, off $5.25 to $124.75; 3M, off $5.25 to $85.75; Eastman Kodak, down $1.63 to $57.88; and Wal-Mart, down $3.38 to $44.50.

* Some large techs stocks pulled Nasdaq down. Cisco Systems shed $4.50 to $132.75, Sun Microsystems lost $3.13 to $93.75 and Microsoft fell $3.44 to $91.31.

But the tech sector had many pockets of strength. Commerce One surged $34.06 to $213.06 and Oracle rose $8.69 to $70.63 after the two said they were combining their Internet business exchanges for major auto makers.

And Puma Technology rose $26.56 to $162.56 after the software maker reported quarterly net income of 3 cents a share, compared with a 14-cent loss a year earlier.

* DoubleClick jumped $9.88 to $91.81 after a Salomon Smith Barney analyst said Internet privacy concerns will be short-lived at the No. 1 online advertising company and set a $165 target.

* Among telecom names, GM Hughes Electronics surged $6.88 to $127.38, Next Level jumped $6.31 to $132.13 and Nokia gained $1.88 to $204.88.

* In the biotech sector, Imclone Systems surged $6 to $100.50 and Immunex gained $8.94 to $201.63.

* In the initial public offering market, chip maker Intersil Holding (ticker symbol: ISIL) vaulted $29 to $54.

* Among Southland stocks, Kennedy-Wilson fell $1.31 to $7 after fourth-quarter profit fell to 11 cents a share from 46 cents. SFX Entertainment rose $3.31 to $35.13 as the producer of concerts and sporting events may spin off Internet assets by year’s end, according to Business Week. SFX denied speculation that it’s in talks with CBS involving an investment or combination.

Market Roundup, C4

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DOW RETREATS

The Dow average tumbled, falling below the 10,000 mark. A1