Market Movers: Rate-Hike Hangover

SAN FRANCISCO (05/17/2000) - The stock market suffered a slight fall today, ending its recent rally. Investor optimism seemed to wane after yesterday's interest rate hikes. The Nasdaq lost 2 percent, or 72.79, to 3644.78. The Dow dropped 164.83, or 1.5 percent, to close at 10769.74.

Although the market held steady yesterday in the wake of the Fed decision, that confidence seemed shaken today, as observers digested the news and pondered the likelihood of further rate increases.

With only a few exceptions, the technology sector headed south. Intel Corp.

(INTC) was up 1 percent after announcing plans for a stock split later this summer. It closed at $123.14. Lucent Technologies Inc. gained 3 percent to $59.81. But Cisco Systems Inc. was down, falling 4 percent to $58. Despite strong earnings and profit statements, Hewlett-Packard Co. (HWP) lost 5 percent today to close at $130.93. Microsoft Corp. (MSFT) lost more than 2 percent to $67.75.

The Internet sector had broad losses, with the exception of Amazon.com Inc.

(AMZN) , which rose 3 percent to $61.

Investor enthusiasm for the Lycos (LCOS) -Terra Networks SA deal all but evaporated today. Lycos Inc., which rose 18 percent yesterday on news of the deal, plunged 21 percent today to close at $57.60. Terra didn't fare much better, losing 12 percent to close at $47.

Veritas Software Corp.'s shares rose more than 6 percent today on news of the company's software deal with IBM. Veritas closed at $111, and Big Blue fell just over 1 percent to $107.43.

Losses were uniform for the Dow, as well. AT&T Corp. (T) was down by as much as 4 percent today after influential Salomon Smith Barney analyst Jack Grubman cut his price target for the company's shares. The stock closed down almost 2 percent to $38.06. Mattel Inc. (MAT) enjoyed a big jump today, however, on news that it has chosen a new CEO. Its stock soared 12 percent to close at $12.62.

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