Stocks Wallow Ahead of CPI; Techs Advance

Stocks closed mixed on Monday as bond yields rose ahead of today’s key inflation report.

But the Nasdaq composite index still managed to add to its latest winning streak, boosted by biotech and Internet stocks.

The Nasdaq index rose 28.49 points, or 0.7%, to 4,274.67. It had surged 5.5% last week.

The Dow Jones industrial average, meanwhile, eased 8.48 points to 10,804.27 on Monday.

Winners had a modest edge on Nasdaq, while losers dominated on the New York Stock Exchange, in moderate trading.

The markets lacked a clear direction as investors awaited today’s release of the consumer price index for June.

In addition, Federal Reserve Chairman Alan Greenspan will testify before a Senate committee on Thursday and investors will be dissecting his comments for clues on the direction of interest rates.

Concern over the CPI and Greenspan’s testimony helped spark selling in the bond market, where long-term yields rose to three-week highs.

The 10-year Treasury note yield ended at 6.15%, up from 6.10% Friday. The 2-year T-note ended at 6.47%, up from 6.43% Friday.

In one sign that the economy may not be slowing as much as some investors were expecting, the government reported a 0.8% rise in May business inventories as manufacturers stepped up production to meet forecasts of rising sales, analysts said.

Despite worries over rates, technology stocks continued to attract buyers drawn to the sector’s powerful rebound of recent weeks.

This week will bring a deluge of second-quarter earnings reports, including from such tech titans as Microsoft and Intel. On Monday, fiber-optics parts maker Corning jumped $8.25 to $275.25 after reporting better-than-expected earnings.

Shares of Qualcomm, also scheduled to release earnings this week, rebounded $6.75 to $69.81 Monday. Japan and Europe upheld three of the wireless telecommunications company’s patents.

Many Internet names also fared well, despite downbeat news from struggling Drkoop.com. The Net group turned hot last week after Yahoo reported better-than-expected earnings. Yahoo rose $3.63 to $131.63 on Monday.

Among other Net winners, VerticalNet rose $10.92 to $62.05, Lycos gained $8.19 to $57.38 and About.com jumped $3.13 to $33.69.

But profit-taking hit Ariba, down $1.81 to $122.75, and Amazon.com, down $1.38 to $41.13.

Many biotech issues continued to advance, although Genentech fell $8 to $153.50 after matching earnings expectations. Amgen rose $1.63 to $72.38, Cephalon surged $5.25 to $71.25 and Celera Genomics rose $6 to $98.75.

Major drug stocks also rebounded from a sell-off last week. Eli Lilly jumped $3.97 to $98.47; Schering-Plough gained $2.75 to $46.56. The Senate Finance Committee said it would probably delay its vote on how to create prescription- drug coverage for Medicare patients.

Tobacco stocks continued to slide in the wake of the massive jury verdict against the industry last week in Florida. Philip Morris fell 88 cents to $23.63; RJR Tobacco lost 63 cents to $25.56.

Brokerage stocks also weakened after last week’s surge. Goldman Sachs fell $4.19 to $100.

In commodities trading, coffee futures jumped 11%, to $1.01 a pound, recovering most of Friday’s drop, as cold weather in Brazil again raised fears of frost damage to that country’s vital crop.

*

Market Roundup: C12, 14