A combination of triple-witching, the quarterly expiration of index options, index futures and equity options and a lower-than-expected Consumer Price Index number had markets looking freaked heading into the afternoon. After a mixed open, both the Nasdaq Composite Index and the Dow Jones Industrial Average have sunk into the red and breadth is positively putrid.

The Dow opened strong and has slipped since. On the positive side,


(XOM) - Get Report

was the brightest blue-chip, lately up 4.2% to $89, an all-time high. However, two-thirds of the industrials are in the red today. Tech and financial components are weighing down the average, lately off 17 to 11,071. The

S&P 500 was down 6 to 1475.

On the Comp, it's been bad all day. Investors are playing the "buy the rumor, sell the news" game with


(ORCL) - Get Report

. Having run that stock up prior to its earnings release yesterday, Oracle was weighing down the Nasdaq, lately off 4.6% to $81. Oracle's operating margins may look good, but as


Joe Bousquin reported, investors are thinking about future demand and reacting negatively to slow software sales. The Comp was down 52 to 3862.

Other big-cap tech names were following Oracle.

Sun Microsystems

(SUNW) - Get Report

was last off 2.5% while

Applied Materials

(AMAT) - Get Report



(CSCO) - Get Report



(INTC) - Get Report

were lower.

Internet plays were weaker, while small-caps coughed up yesterday's gain. The

Russell 2000 was last off 5 to 534.

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index continues to have a terrible September, and year for that matter, dropping 11 to 809.

The quarterly expiration of index options, index futures and equity options generally causes some volatility in the afternoon. Also,

Standard & Poor's

is rebalancing its indices, and that should also cause some gyrations in the market.

Sector Focus

Oil stocks continue to be red-hot. The

American Stock Exchange Oil & Gas Index

hit another record high this morning, but was lately up 3.9%. ExxonMobil,





(TX) - Get Report

all helped the index power out more gains as crude oil futures continue to rise. The

Philadelphia Stock Exchange Oil Service Index

gained 2%.

October crude oil futures on the

New York Mercantile Exchange

were last up $1.16 to $35.23.

On the downside, the

Amex Broker/Dealer Index

fell 2%.


The 10-year Treasury note was lately off 14/32 at 99 7/32, and yielding 5.85%.

Yesterday, an early rally in the bond market after a surprisingly friendly reading on inflation at the wholesale level, morphed into a selloff that moved the 30-year bond's yield decisively higher than the 10-year note's yield for the first time since January. The selloff came amid shifting views on monetary policy and heavy issuance of corporate bonds.


wrote a separate article on the steepening

Treasury curve.