Once again, most of the market continues to respond in the classical manner to the prospect of a

Federal Open Market Committee

that will continue to raise rates until the economy slows. Banks are lower. Consumer stocks are lower. Drugs are lower.

Tech is not.

This is not the way that it used to be. It used to be that tech stocks, because they were growth stocks, would run into trouble when the

Fed

started tightening. That's what happened when the Fed was turning the screws in 1994 -- a year when the

Nasdaq Composite Index

was dead in the water. And this made a sort of sense. An economy that would slow (and when the Fed wants to slow the economy, it eventually does) meant less money for tech investment. And that meant slower profits growth and, as a result, a lower valuation.

This time is different -- or at least it's different as far as, for the moment, the market is concerned. And there are some pretty good arguments for why this has happened. For one, tech is seen as much more of a necessity -- businesses can't afford

not

to invest in technology. Second, many companies -- particularly overseas -- are understood to have held back on tech spending because of Y2K concerns, and are now playing catch-up. And this leads us to a third point -- tech is not as much of an insular, U.S.-only world anymore. With an ever-greater share of these companies' profits coming from overseas, tech is more insulated from the ups and downs of the U.S. economy than before.

Moreover, tech companies are seen as somewhat immune to changes in interest rates because, pointed out Jim Benning, trader at

BT Brokerage

, "they get their money from venture capital and IPOs." Not at the loan office.

And so tech flourishes while everything else wilts.

"It's still very much a tech stock market -- even more so now," said Dick Dickson, technical analyst at

Scott & Stringfellow

in Richmond, Va. "I know breadth is doing a little better, but as far as the gains are concerned, tech's the one."

Dickson noted that it is the old-tech companies (making computers and servers and the like) which are driving the rally these days -- indeed,

TheStreet.com Internet Sector

index is down on the year. Part of that is probably because there are a lot of

new IPOs in the pipe, as well as many companies that are coming out of

lockup.

But one could also argue it gets back to this economy thing. Companies can't afford not to invest in old tech. Old tech gets revenues overseas. Dot-coms, however, are more dependent on consumer and are, for the most part, strictly American affairs.

Whether the pattern of tech outperformance goes on will be interesting to see. "I think tech is going to continue to head higher, but I also think we're in the late innings of the game," said Dickson. "As we get into the springtime, that's generally when you see tech stocks begin to falter."

The

Dow Jones Industrial Average

was lately off 99, or 0.9%, to 10,865, while the broader

S&P 500

was down 8, or 0.6%, to 1417.

The Nasdaq Composite was up 28, or 0.7%, to 4272.

TheStreet.com Internet Sector index was down 7, or 0.6%, to 1134.

The small-cap

Russell 2000

was up 5, or 0.9%, to 530.

The Treasury market continued to give up some of its recent gains. The 30-year was down 19/32 to 97 13/32, yielding 6.32%. The 10-year was down 12/32 to 95 23/32, yielding 6.61%. (For more on the fixed-income market, see today's

Bond Focus.)

Market Internals

New York Stock Exchange:

1,183 advancers, 1,687 decliners, 518 million shares. 65 new 52-week highs, 104 new lows.

Nasdaq Stock Market:

2,151 advancers, 1,794 decliners, 907 million shares. 264 new highs, 43 new lows.

For a look at stocks in the midsession news, see Midday Movers, published separately.