SAN FRANCISCO -- Stop me (oh ho ho) stop me, stop me if you think that you've heard this one before:

Alan Greenspan

spoke about the likelihood of higher interest rates today, sending blue-chip stocks reeling.

But in a new twist on the old song, tech favorites couldn't resist the siren selling in "old economy" stocks, and the

Nasdaq Composite Index

retreated from its record-setting pace. The

Russell 2000

set another record but even that small-cap proxy cooled off in the final hour, as the majority of stocks reflected the mood of most songs by

The Smiths

. (Depressed, that is.)

"Until market forces, assisted by a vigilant

Federal Reserve

, effect the necessary alignment of the growth of aggregate demand with the growth of potential aggregate supply, the full benefits of innovative productivity acceleration are at risk of being undermined by financial and economic instability," Greenspan said in a

speech at a conference at

Boston College

.

Those remarks (and others) poured cold reality on anyone who thought Friday's

employment report would prompt the Fed to rein in its aggressive monetary stance. A rethinking of that notion -- which helped spur stocks higher across the board

Friday -- snapped the five-session winning streak of the

Dow Jones Industrial Average

, which fell 196.70, or 1.9%, to 10,170.50 after trading as low as 10,121.48.

The price of the 10-year Treasury note fell 7/32 to 100 18/32, its yield rising to 6.42%.

But Brian Belski, chief investment strategist at

George K. Baum

in Kansas City, Mo., argued Greenspan didn't depart from his recent commentary and thus wasn't truly responsible for the action -- a view shared by many.

"You're seeing a normal pullback from

the Dow being overextended as of Friday," Belski said of today's setback. "It's all normal-type action."

Further supporting the notion that today's decline was more of a technical move than fundamental story, financial stocks were relatively unscathed today, the strategist noted. "It's more a case of some of these Dow stocks bounced up too much from oversold."

The Dow was most restrained by tech components

Microsoft

(MSFT) - Get Report

and

Intel

(INTC) - Get Report

, as well as

American Express

(AXP) - Get Report

.

The Dow avoided a wider loss thanks to a big advance by

Hewlett-Packard

(HWP)

, which leapt 5.1% in concert with its recent spinoff

Agilent Technologies

(A) - Get Report

. Agilent soared 40% after announcing new switching technology designed to increase the speed of fiber-optic networks.

With the Agilent news plus a fiber-optic conference opening in Baltimore, shares of several names in the sector were sharply higher.

JDS Uniphase

(JDSU)

rose 5%,

Avanex

(AVNX)

jumped 15.3% and

Advanced Fibre Communications

(AFCI)

rose 14.8%, just to name a few.

Net Faves Rally

With those names in the lead and big Internet favorites such as

Yahoo!

(YHOO)

and

CMGI

(CMGI)

also in favor, the Nasdaq Composite rose as high as 4980.15 around 2 p.m. EST.

But the late afternoon proved troubling and the Comp closed off 9.94, or 0.2%, to 4904.85 as mega-cap tech names such as Microsoft, Intel, and

Cisco

(CSCO) - Get Report

followed their blue-chip counterparts lower.

Additionally,

3Com

(COMS)

shed 16.2%, continuing to retreat from last week's big advance. Its

Palm

(PALM)

, freshly traded as of last week, sledded 17 1/8, or 21.3%, to 63 1/8.

Market players debate the significance of round numbers, but "the Comp rolled right off 5000 and came back with the rest of the broader market," noted one equity trader. "Everyone was yelling '5000, 5000' and it never stood a chance. This group will continue to do well, but today you saw some of the volatility increased."

Behind strength in Yahoo! and CMGI,

TheStreet.com Internet Sector

index rose 31.64, or 2.6%, to a record 1252.74. Meanwhile,

TheStreet.com New Tech 30

rose 101.76, or 13%, to 883.87, getting a big lift from

Internet Capital Group

(ICGE)

, which rose 21% after

Robertson Stephens

upped its recommendation to strong buy. Unveiled Jan. 5, the TSC New Tech 30 is a market-cap-weighted index focusing on tracking the so-called hot money part of the market. A list of index components is available at

http://www.thestreet.com/newtech/.

The Russell 2000 gained 3.76, or 0.6%, to 601.64 as small-cap tech and biotech names continue to enjoy heightened interest from traders. The

American Stock Exchange Biotech Index

rose 4.7%.

NeoRX

(NERX)

was the standout in the biotech group, rising 152% after reporting successful testing of its cancer treatment on laboratory mice.

The

S&P 500

followed the Dow lower, dipping 17.89, or 1.3%, to 1391.28 as weakness in most major industry groups overshadowed runaway gains in tech components such as

Advanced Micro Devices

(AMD) - Get Report

, which rose 15.7% after

unveiling a one-gigahertz microprocessor.

No Unifying Theme

Despite the hubbub about Greenspan, there was no overarching factor moving stocks today, traders said.

Jay Meagrow, vice president of trading

McDonald

in Cleveland, noted airline stocks were hurt by negative comments from

Goldman Sachs

while utility stocks got "pummeled" after

Edison International

(EIX) - Get Report

, down 30%, warned of a profit shortfall. The

American Stock Exchange Airline Index

shed 2.7% while the

Dow Jones Utility Average

slid 9.40, or 3.2%, to 280.80

Meanwhile, retailing stocks were flattened by a

profit warning by

Williams-Sonoma

(WSM) - Get Report

, which dumped 39.3%. The

American Stock Exchange Retailing Index

lost 3.2%.

Despite the concerns about certain names and groups, Meagrow observed the buying interest in small-caps remains strong, although "I don't think anybody is chasing" anything.

In

New York Stock Exchange

trading, 1.03 billion shares were exchanged while declining stocks led advancers 1,908 to 1,116. In

Nasdaq Stock Market

action just under 2 billion shares traded while losers led 2,190 to 2,099. New 52-week lows bested new highs 189 to 27 on the Big Board while new highs routed new lows 505 to 121 in over-the-counter trading.

Among other indices, the

Dow Jones Transportation Average

fell 58.36, or 2.4%, to 2376.09 and the

American Stock Exchange Composite Index

gained 8.65, or 0.9%, to a record 1022.36.

For coverage of today's top stocks in the news, see the Company Report, published separately

.