Red was everywhere, but not because it's Valentine's Day.

The major indices were still smarting over what

Fed Chairman

Alan Greenspan didn't

say yesterday when he

spoke before the

Senate Banking Committee

.

Yesterday, the

Dow Jones Industrial Average and the

Nasdaq Composite Index dropped on the lack of urgency in Greenspan's testimony. Today, the major indices continued to do so, though both started on the upside at the opening bell.

As has been the case in the past several weeks, there was no leadership. More and more market-watchers are saying that the market will simply drift until the second half of the year, when the rate cuts will start to be felt. Even more, the market is waiting for consumer sentiment and confidence to improve, which will bring investors and money back.

Meanwhile, the Nasdaq lately had moved up over the flatline, just barely. More than a few components were suffering from bad news, pulling them and related stocks downward.

JDS Uniphase

(JDSU)

lately was the most actively traded stock on the Comp, and was up 0.7% to $38.69. The fiber-optics component supplier, which completed its merger with former rival

SDL

(SDLI)

, warned yesterday after the close that its third-quarter earnings would miss estimates, citing uncertainty in capital spending plans by telecom carriers and customer inventory adjustments.

And non-tech company

Coldwater Creek

(CWTR)

was plummeting 43% to $20.06 after the women's clothing retailer cut its fourth-quarter earnings estimates to between 4 cents and 7 cents a share because of sales shortfalls. The

First Call/Thomson Financial

seven-analyst estimate for the quarter was 66 cents.

There were some bright spots on the index, including

Sycamore Networks

(SCMR)

which announced

better-than-expected earnings after Tuesday's close. The news helped competitor

Ciena

(CIEN) - Get Report

, which was rising 7.5% to $74.38.

Also on the upside was

Applied Materials

(AMAT) - Get Report

, which was getting some lift off its good earnings announcement also announced after the close yesterday.

J.P. Morgan

upped the company to a long-term buy from market performer on the announcement. Still, the company offered up a dim outlook for the future, sparking a stream of EPS cuts.

Elsewhere, on the

New York Stock Exchange,

ConAgra

(CAG) - Get Report

was getting flattened 21.8% to $19.43 after announcing that it had to

lower its earnings estimates because of higher energy costs.

The Dow's biggest drag was diversified manufacturer

3M

(MMM) - Get Report

, which had been rallying lately. It looks like it was the victim of some profit-taking today; it was off 3% to $110.72.

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Sector Watch

Semis were bouncing today, with help from the aforementioned Applied Materials. The

Philadelphia Stock Exchange Semiconductor Index

was jumping 4.2%. Component

Xilinx

(XLNX) - Get Report

, up 4.3%, announced that it would expand its Irish unit, creating 500 new jobs.

Another factor helping the sector was the note from

J.P. Morgan

, which raised not only Applied Materials to long-term buy from market performer, but also

KLA-Tencor

(KLAC) - Get Report

,

Novellus Systems

(NVLS)

,

ASM Lithography

(ASML) - Get Report

and

Varian Semiconductor Equipment

(VSEA)

.

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Bonds/Economy

Treasury prices are mixed. The market has little to respond to until more-relevant economic data is released at the end of the week. Federal Reserve Chairman Greenspan's Senate testimony yesterday was less aggressive in the context of interest rates than traders had wanted. Although Greenspan discussed the fragile economy and even suggested that a recovery might not gather pace until much later this year, he also hinted that the fundamentals were properly configured for now to help the revival. A

Reuters

poll of 25 Wall Street bond dealers shows that the majority expect a half-point cut in the

fed funds rate at the next

Federal Open Market Committee meeting on March 20.

The benchmark 10-year

Treasury note lately was down 5/32 to 99 10/32, raising its yield to 5.089%.

In economic news,

business inventories

(

definition |

chart |

source

) rose by 0.1% for the month of December, down from 0.3% in the previous month. The growth was .1% less than economists had predicted and the smallest rise seen since January 1999. The trend confirms Greenspan's observations yesterday that information technology is enabling companies to better balance their stock of goods when faced with fluctuating demand. The year-to-year rise in the number also dropped to 6.1% from 6.6%; it's now at its lowest level since May.

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