(Updated from 10:53 a.m. EDT)

Amid the absence of any good earnings news this morning, the

Nasdaq Composite Index continued its miserable journey south. The index was lately sharply lower and fast approaching its May low of 3164.5. The

Dow Jones Industrial Average did another head-fake at the open, sticking its nose into the green but slipping into the red shortly thereafter.

Considering it's

Columbus Day and Yom Kippur, the ranks on Wall Street are substantially thinner than usual, seriously paring trading volume.

Hewlett-Packard

(HWP)

was the Dow's heartiest contributor, and was rebounding from last week's slide, adding some 10 points of upside to the index. Hewlett was lately up 2% to $88.94.

General Motors

(GM) - Get Report

, was foiling H-P's efforts, taking about 9 points off the Dow after

Deustche Bank Alex. Brown

cut its price target for the company to $80 from $89 on concerns about pricing incentives and a slowdown in European sales.

Tech bellwethers

Intel

(INTC) - Get Report

,

Cisco

(CSCO) - Get Report

and

Dell

(DELL) - Get Report

weren't letting up in their slide and were the most actives on the tech exchange this morning. Intel and Dell have been falling since late September.

Connetics

(CNCT)

was also plummeting after

Lehman Brothers

cut its rating on the company to neutral from outperform. Connetics was down 79.7% to $5.19.

But there were some long gainers today.

Electronic Data Systems

(EDS)

was one of them, lately up 13.9% to $46.25 after announcing Friday after the close that it received a $6.9 billion contract to link the

Navy

and

Marines'

computer systems.

AT&T

(T) - Get Report

TheStreet Recommends

shares were falling after a

Wall Street Journal

article that reported that

Senate Judiciary Committee

chairman Orrin Hatch (Rep., Utah) warned that ties between the telecom and a merged

America Online

(AOL)

and

Time Warner

(TWX)

could threaten competition. The company's shares have been in the sewer since early May.

Last week,

Salomon Smith Barney's

Jack Grubman cut the ratings and price target on the beleaguered company, citing lower expectations for AT&T's consumer and business long-distance segments. AOL said it shouldn't have to break off its ties with AT&T because U.S. regulators addressed the issue in a review of an earlier merger. AT&T was lately off 1.8% to $26.75.

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Sector Watch

Renewed strength in oil prices was no good for market sentiment. But it sure was good for oil and gas stocks. The

American Stock Exchange Oil & Gas Index

was up 1.4%, while the

American Stock Exchange Natural Gas Index

was 1.3% higher.

Crude oil prices rose as much as 88 cents to $31.10 as violence escalated in the Middle East and an early spell of cold weather hit the U.S. Oil reserves are already at a 24-year low and a number of refineries this month are reducing their capacity for maintenance.

Brokerage stocks continued to wallow in their misery after getting badly hit Friday by concerns of margin calls and chatter over rumored losses on junk-bond trading. Investors are worried that trading-related losses will hurt the revenues of the big brokerages.

TheStreet.com

wrote about one brokerage's

denial of the rumors as well as a

preview of financial services sector earnings. The

American Stock Exchange Broker/Dealer Index

was 3% lower.

The drug stocks were jumping in early trading, despite weakness in pharmaceutical

SmithKline Beecham

(SBH) - Get Report

, which was off 0.7% to $66.94. The company said it will buy Block Drug for $1.2 billion in cash for U.S. companies Polident dentures cleaner and Sensodyne toothpaste. SmithKline Beecham is merging with

Glaxo Wellcome

(GLX)

to form the world's No. 2 drugmaker.

Glaxo Wellcome was also falling, off 0.6% to $58.94. The

American Stock Exchange Pharmaceutical Index

was down 0.3%.

Bonds/Economy

The bond market is closed for Columbus Day. The benchmark 10-year Treasury note last traded on Friday at 99 15/32, yielding 5.820%.

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