Market Update: Dow, Nasdaq Both End in Red; Techs Battered - TheStreet

Major indices looked like their morning positions as stocks were weighed down by worries about third-quarter earnings reports.

The losses in the

Nasdaq Composite Index and

Dow Jones Industrial Average looked modest, but internals were really lousy. On the

Nasdaq Stock Market

, where decliners numbered 2,331 compared with 1,593 advancers. New lows are at a dismal 207, while a paltry 44 stocks scored new highs.

The general malaise hanging over the market can largely be chalked up to profit worries, as last night brought another round of bad news from some high-profile names. PC giant

Dell

(DELL) - Get Report

warned that slower sales growth could dent profits in the third and fourth quarters. Dell ended off 10.6%.

Other box-makers, including

Compaq

(CPQ)

and

Gateway

(GTW)

were also feeling the pain.

Ricky Harrington, chief technical analyst at

Wachovia Securities

in Charlotte, N.C., thinks the market looks bad and will only get worse in the months ahead. "It is going to be a very difficult market in the months ahead," he said. "The average stock has really taken a beating."

"This is the most misleading bear market," he said, noting that the strength in some of the Dow components has masked the weakness of the broader market.

"The average investor is getting a misleading picture of what is really happening," Harrington said. "He'll wake up when he gets his mutual fund results this quarter or at the end of the next quarter."Harrington said he thinks the Fed is doing everything possible to keep the economy on an even keel, but "you don't have this kind of damage being done to the market with some implications for the overall economy."

In sector news, consumer stocks got a lift after some positive comments from

Merrill Lynch

analyst Heather Murren, who raised her intermediate-term ratings on several bellwethers to accumulate from neutral. The upbeat outlook, combined with a flight from tech and into more defensive issues, pushed the stocks higher.

Gillette

(G) - Get Report

was up 4.2%, while Dow component

Procter & Gamble

(PG) - Get Report

was up 4.1%. The

Morgan Stanley Consumer Index

was up 1.4%.

Retail stocks were mixed after varied sales results this morning. While upscale retailer

Talbots

(TLB)

said its same-store sales popped 24.8%,

Gap

(GPS) - Get Report

was wearing khakis of a different color, saying same-store sales dipped 8% in September. Talbots tacked on 10.7%, while Gap also managed a gain, up 6.6%.

J.C.Penney

(JCP) - Get Report

donned the same outfit as the Gap, reporting a 4% dip in department store-sales and an 8.8% tumble in drugstore sales. The stock was down 10.1%.

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Sector Watch

Oil and gas stocks were under pressure after a dip in oil prices when U.S. energy firms snapped up the national reserves offered by the government. The

American Stock Exchange Oil & Gas Index

was down 0.4%, while the

Philadelphia Stock Exchange Oil Service Index

was off 1.1%.

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Bonds/Economy

Treasuries were little changed on not much news ahead of tomorrow's release of the September

employment report, the most important economic report to roll around each month.

There were no major economic reports today, although the

Federal Open Market Committee just released the

minutes of its Aug. 22 meeting.

At its most recent meeting on Tuesday, the FOMC

cited the still-high level of labor-force utilization -- aka low unemployment rates -- as its main reason for maintaining an aggressive posture on interest rates.

The latest readings on unemployment may have implications for monetary policy. In August, the regular unemployment rate was 4.1% and the

augmented unemployment rate -- the measure preferred by the Fed -- was 6.9%.

The benchmark 10-year

Treasury note lately was up 2/32 to 99 7/32, yielding 5.856%.