If anyone can figure this market out please send along an email.

After opening weaker, the technology sector has cut its losses, but remains marginally lower. There's really nothing new out there. The market remains spooked by the

Federal Reserve

and the high valuations many technology stocks hold. Meanwhile, technical indicators also don't look good, though yesterday's turnaround suggested to some that a short-term bottom was in place.

The

Nasdaq

was able to bounce back from early losses, but still showing signs of weakness. It recently was down 41.43, or 1.23%, to 3322.78.

TheStreet.com Internet Sector

index was down 12.57, or 1.5%, to 805.81.

In a strategy update released today,

Prudential Securities

chief economist Dick Rippe wrote there was "no reason to think the Fed is done taking action until they have seen conclusive signs of slowing. So far, we have not seen that type of data. Anything that reflects the consumer will be closely watched, like employment and income reports." Rippe wrote that he expected the Fed to raise rates by 50 basis points at its June meeting, though he stressed that it was a preliminary guess and will depend on the flow of data between now and then.

In the same note, Prudential chief technical strategist Ralph Acampora wrote that the technology stocks look weak "and will most likely continue to present a problem for the overall stock market." He wrote that the best way to play the market "is to identify key support levels on these issues and make sure that they hold -- if the support areas break, then you must act accordingly."

Acampora wrote that there was not enough evidence to suggest that the "difficult" May/June seasonal period was over and listed a couple of levels to be broke on the upside to confirm a strong rally. He wrote that the Nasdaq must close above 4,000 to be a "good move," then above 4600 to be a "very impressive advance." Likewise, he sees a close below 3367 as a "yellow" flag, a close below 3200 as a "crimson" flag, which would be very negative.

While Net stocks were mostly weaker, losses were marginal. Among stocks on the decline,

Inktomi

(INKT)

was down 7 7/16, or 6%, to 110 5/8.

eBay

(EBAY) - Get Report

, which gained 15% yesterday on no particular news, was giving some back, down 7 5/16, or 5%, to 128 7/8. Also,

Yahoo!

(YHOO)

, which gained 5% yesterday, was down 4 1/4, or 3%, to 122.

On the upside,

Lycos

(LCOS)

was up 1 5/8, or 3%, to 55 3/8 as investors continued to digest its acquisition by

Terra Networks

(TRRA)

. Also,

Excalibur Technologies

(EXCA)

, a provider of search solutions for Intranet portals and Internet/e-commerce applications, was up 1 13/16, or 6%, at 31 5/8.

Raymond James

began coverage of the stock with a buy rating.