(Updated from 10:49 a.m. EDT)

Fiber-optics leader

JDS Uniphase

(JDSU)

was the catalyst for a roaring rally in optical stocks at the open, which helped to extend yesterday's late afternoon rally on the

Nasdaq Composite Index. But the optical stocks and the Nasdaq were lately pulling back, some names even turning lower. The Comp has been see-sawing around the flatline recently.

JDS last night issued a bullish outlook for coming quarters as part of its third-quarter

earnings report.

But it's hard to tell where the market will close today. The past week has been plagued by levels of volatility not seen in some 10 years. And some analysts are skeptical of the mismatch between

Nortel

(NT)

and JDS' numbers. (

TheStreet.com

earlier wrote about

Nortel's earnings.)

And this morning's

gross domestic product figures revealed a sharp slowdown in economic growth in the third quarter, which could fuel investor jitters over slowing corporate profits.

Opticals and networking stocks, among the most recent tech darlings of Wall Street, flattened the Nasdaq on Wednesday following Nortel's post-close Tuesday warning of slowing optical sales. Worries about earnings in these sectors also slammed the Nasdaq on Thursday morning, though the index made a stunning turnaround in late afternoon and managed to close higher.

JDS Uniphase, which began its recovery late yesterday, was lately up 6.2%. Other fiber-optic stocks were up, too:

Ciena

(CIEN) - Get Report

was 1.5% higher,

Corning

(GLW) - Get Report

was climbing 6.3%, and

SDL

(SDLI)

was 5.1% higher.

Networking infrastructure maker Nortel was also up, lately by 2.3%. But lately

Cisco

(CSCO) - Get Report

TheStreet Recommends

and

Juniper Networks

(JNPR) - Get Report

had turned down, falling 2.9% and 4.0%, respectively.

The

Dow Jones Industrial Average, which hasn't been beaten up over the past few weeks like the Nasdaq, was extending its morning rally, helped by strength in

Hewlett-Packard

(HWP)

, up 4.1% and adding about 21 points to the Dow.

Semiconductor favorite

Intel

(INTC) - Get Report

was also higher, up 2.4% and contributing 6 points of strength to the Dow. The stock has been slowly coming back of late after losing over half its value following an early September earnings warning.

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Sector Watch

Most tech sectors were in the green this morning, though biotech and semiconductors were not. Biotech, which has been a tech safe haven for the past few weeks, was suffering after

Amgen

(AMGN) - Get Report

cut its sales and earnings forecasts.

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Bonds/Economy

Bonds initially rallied after the GDP numbers but then fell back. They were lately unchanged.

The benchmark 10-year

Treasury note is unchanged at 100 13/32, yielding 5.696%.

The 30-year

Treasury bond is also unchanged at 107 10/32, yielding 5.733%.

Economic data this morning were weaker than expected.

GDP

(

definition |

chart |

source

) for the third quarter rose 2.7%, after a rise of 5.6% in the prior period. An increase of 3.4% had been expected.

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