We can hardly believe it ourselves!


Dow Jones Industrial Average poked its weary head into positive territory and stayed there as the market's tone improved in afternoon trading. After the morning madness in


(INTC) - Get Intel Corporation (INTC) Report

, many market watchers left the indices for dead today.

But the Dow ended up 82 to 10,847, as

J.P. Morgan

(JPM) - Get JPMorgan Chase & Co. (JPM) Report



(BA) - Get Boeing Company Report

, among others, counteracted


(INTC) - Get Intel Corporation (INTC) Report

dead-weight drop of 22%, which weighed down the Dow by more than 80 points.

Meanwhile, the

Nasdaq Composite Index wasn't too shabby, ending down only 25 to 3804 after recovering from a 214-point loss.

A whopping 301 million shares of Intel have changed hands, a record volume for a single issue on the Nasdaq. The company said last night it expected third-quarter revenue to be 3% to 5% up from the second quarter's $8.3 billion. The Santa Clara, Calif., chip maker said third-quarter gross margin would also fall below estimates, at 62% vs. the previous 63% to 64% guidance.

A slew of brokerage firms cut Intel's ratings and earnings per share estimates this morning, including

Merrill Lynch


Lehman Brothers


Deutsche Banc Alex. Brown


Credit Suisse First Boston


Salomon Smith Barney


"This is the big shoe everyone has been waiting for to drop," said Tony Dwyer, chief market strategist at

Kirlin Holdings

."With the fear hanging over the market for the last two to three weeks, this creates a climactic situation. "We'll have back-and-forth action for a few days, but now we have hit a bottom," he said. "What else could hurt tech?"

Brian Finnerty, head of trading at

C.E. Unterberg Towbin

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, expressed a similar viewpoint. "The market is acting very well

considering the news," he said. "There will be a lot of negative press, and we might get another bout of selling after the weekend, but it's nowhere near" what some people had expected, he said, noting a bounce in



and some fiber-optic stocks.

Finnerty said the latest Intel news is something like an "exclamation point" to a market that's been jittery all year. "I guess it shows that the world isn't over."

This earnings preannouncement season -- the time ahead of earnings reports when companies warn they might miss estimates -- has seen a euro in the dumps, record highs in oil prices and a slowing economy, all of which have had investors on edge. In the past few weeks, Wall Street has severely punished the share prices of several companies that have issued warnings.

The European Central Bank, the U.S. and Japan have joined together to buy euros in an attempt to break the euro's fall. It is the first time since 1995 that Europe, Japan and the U.S. have joined together to intervene on behalf of a currency. The euro soared up to 4% against the dollar, recently trading at $0.8880.

And crude-oil futures continued to trade lower today. November crude-oil futures were lately trading at $32.60 a barrel, after falling $1.24 to $34 yesterday.

Dwyer noted the intervention in the euro and said he thinks energy prices have peaked. "All this negative sentiment sets the stage for a rally," he said.

When not watching Intel today, investors were listening for words of caution or optimism from a slew of heavy-hitters in several sectors that were

presenting at the

Banc of America Securities Investment Conference

today in San Francisco.

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Sector Watch

Numerous tech sectors were coming under pressure in the wake of Intel's news. Meanwhile, one or two sectors were benefiting from the rush out of high tech. Drug stocks, in particular, were getting some good medicine as gains in

Bristol-Myers Squibb

(BMY) - Get Bristol-Myers Squibb Company Report


American Home Products


sent the

American Stock Exchange Pharmaceutical Index

up 3.5%.


Philadelphia Stock Exchange Semiconductor Index

slid lower, ending down 5.9%, though off its earlier lows. The

Philadelphia Stock Exchange Computer Box Maker Index

was off 2.9%.

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The bond market is benefiting from the weakness in stocks, which adds to its conviction that the economy will continue to slow, keeping the

Fed from hiking interest rates further. It is also benefiting from the continued slide in oil prices, which had reached 10-year highs earlier this week.

This morning's coordinated intervention by Europe, Japan and the U.S. to halt the euro's slide has mixed implications for Treasuries. On the one hand, it has given a lift to European government bond prices, making Treasuries look cheap in comparison. On the other hand, the countries that participated in the intervention are expected to sell short-term Treasuries to finance their purchases of euros when the transaction settles. Short-term Treasuries ordinarily benefit from flight-to-quality sentiment when the stock market falls steeply, and they would be in this case, too, were it not for the intervention, said Tony Crescenzi, CEO of Bondtalk.com.

The 10-year Treasury note lately was down 2/32 to 99 10/32, pushing its yield to 5.844%.

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