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Investors play Monday's
market close to the vest
By CBS.MarketWatch.com
Last Update: 5/6/2002 12:00:01 PM

NEW YORK (CBS.MW) -- Investors played Monday's market close to the vest ahead of a key quarterly update from Cisco Systems, the world's biggest networking company, and a Federal Reserve interest-rate policy meeting.
The rising chip sector propped up the Nasdaq after a Merrill Lynch analyst indicated that the group's outlook is improving and ASML Holdings, a European semiconductor firm, touted its own growth prospects.

"That [ASML's announcement in Europe] is what really got the group started to begin with," said Marc Klee, manager of the John Hancock Technology Fund.

Broadly, U.S. indexes failed to hold on to any meaningful gains as caution ruled. The Nasdaq Composite ($COMPQ: news, chart, profile) rose 5 points, or 0.3 percent, to 1,618 -- near its lowest levels since last fall. The Nasdaq 100 Index ($NDX: news, chart, profile) gained 0.7 percent.

The Dow Jones Industrial Average ($DJ: news, chart, profile) gave up the 10,000 benchmark by midday with losses accelerating into late trading: down 39 to 9,967.

"We're traipsing into the week here," said Bryan Piskorowski, market commentator at Prudential Securities. He noted there's a lack of any other catalyst so far than the Fed, causing a sort of "paralysis" in trading.

Cisco's (CSCO: news, chart, profile) results and the Fed's latest statement should address two of the biggest concerns on Wall Street: the threat of inflation and the timing of a pick-up in corporate information technology spending.

Cisco's trading volume trailed those of troubled WorldCom (WCOM: news, chart, profile) and Sun Microsystems (SUNW: news, chart, profile).

Notably, Dow component Hewlett-Packard (HPQ: news, chart, profile) gained as its new ticker symbol debuted to reflect the Compaq merger. Enthusiasm for select issues carried beyond tech: Dow components McDonald's (MCD: news, chart, profile), Philip Morris (MO: news, chart, profile), Wal-Mart (WMT: news, chart, profile) and Procter & Gamble (PG: news, chart, profile) all advanced.

Outside the equity markets, financial guru and insurance investor Warren Buffett made some gloomy comments revealing his certainty that a nuclear terrorist attack on American soil is all but assured at some point in the undetermined future. See full story.

"It [Buffett's comment] will fall into the aiding and abetting category," said Piskorowski. "That scenario has been with us since Sept. 11." Read Thom Calandra's take in StockWatch.