A thin market was emerging from a violent morning session in much the shape we've come to expect of late: Old Economy up, New Economy down.

The resurgent

Dow Jones Industrial Average

was once again confounding its disbelievers, up 132, or 1.2%, to 10,813 after falling as low as 10,603.61 early in the session. The Dow was getting especially juiced by its financial components.

American Express

(AXP) - Get Report

,

J.P. Morgan

(JPM) - Get Report

and

General Electric

(GE) - Get Report

each were up more than 3%, with GE's gains coming after it said it expects to beat expectations for its first-quarter earnings.

Tech performance remained spotty, with the

Nasdaq Composite Index

down 39, or 0.9%, to 4571. But that's way up from a morning low of 4467.53, a level that put the Comp 10.8% down from the intraday high it set back on March 10. Investors have bought the Nasdaq whenever it's hit correction levels this year.

"The 10% level seems to be some sort of magic trigger in the minds of investors," said Charles Crane, chief market strategist at

Key Asset Management

. "Folks seem willing to throw money into the market just on that basis alone. Funds started flowing into the most liquid stocks first and subsequently spread out to the broader list of OTC names."

Traders were ascribing the sharp morning dip to a lack of volume, as many market participants have been sidelined by today's

Federal Open Market Committee

meeting. "It's been a very illiquid market today," said Rob Cohen, co-head of listed trading at

Credit Suisse First Boston

. "People are not playing the market aggressively."

That's not necessarily because the outcome of the FOMC meeting is unclear. Nearly everyone believes the

Fed

announce a 25-basis-point hike when it concludes its meeting at 2:15 p.m. EST. It's also widely believed that the Fed will issue another boilerplate expression of its concerns about inflation going forward.

But when a Fed meeting happens in a market full of the wild equity action we've seen in names like

MicroStrategy

(MSTR) - Get Report

TheStreet Recommends

and

Protein Design Labs

(PDLI) - Get Report

-- well, a wait-and-see approach might not be the worst idea.

"People are confused on two fronts," said Cohen. "How to interpret the Fed's actions, and what's fundamentally going on in equities. People are not inclined to actively commit money to the market."

Banking issues were extending last week's strong rally, with the

Philadelphia Stock Exchange/KBW Bank Index

up 3.5%.

Biotech stocks were still under pressure. Protein Design Labs was getting killed after saying yesterday afternoon that its European patent claims would be revoked. It was lately off 54 1/8 to 80, a 40.4% decline. The

American Stock Exchange Biotechnology Index

was off 6.2%.

Tobacco issues were looking strong after the

Supreme Court

ruled that the

Food and Drug Administration

lacks the authority to regulate tobacco products. Dow component

Philip Morris

(MO) - Get Report

was up 5/16, or 1.6%, to 20 1/4.

Small-caps and Net stocks were lower. The

Russell 2000

was getting slammed with a loss of 9 1/2, or 1.7%, to 540, while the

TheStreet.com Internet Sector

index was down 10, or 0.8%, to 1175.

Market Internals

Volume was light. Breadth was narrowly positive at Broad and Wall, but sharply negative among electronically traded issues.

New York Stock Exchange:

1,427 advancers, 1,343 decliners, 621 million shares. 26 new 52-week highs, 30 new lows.

Nasdaq Stock Market:

1,269 advancers, 2,788 decliners, 1 billion shares. 23 new highs, 99 new lows.

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