The

Nasdaq Composite Index managed to pull off an about-face from this morning's weakness.

Earlier the index touched as low as 3382.53 before bouncing over the break-even line. Yesterday, the index kept on its recent trend of climbing at the opening and falling at the close.

Today, it bucked that trend, starting with the trip to the downside and then moving into rally mode. It drove as high as 3496.29 around 1:20 p.m. EDT, then lost ground again and then moved higher once more.

Ray Hawkins, vice president of block trading at

J.P. Morgan

, said it was encouraging to see a rally in the Comp. In the past people were overly enthusiastic about tech stocks, he said, but in the last couple of days he had been hearing the other side of the extreme as people said they didn't want to touch tech stocks again.

"When I saw

Goldman Sachs

market strategist Abby Joseph Cohen's comments on tech stocks yesterday, I thought it was a good sign," Hawkins said.

But it wasn't only the comments boosting the Comp. Optimism over

Micron Technology's

(MU) - Get Report

earnings -- to be released today after the close -- was helping the semiconductor sector and the Nasdaq, as many of those semis are listed there. The

Philadelphia Stock Exchange Semiconductor Index

was lately up 4.5%.

Elsewhere,

Oplink Communications

(OPLK)

was pushing higher in its debut. The stock lately was zooming 72% to $31.13.

But pressure from software companies such as

Oracle

(ORCL) - Get Report

-- which was hurt by

Computer Associates'

(CA) - Get Report

earnings warning last night and a downgrade this morning -- as well as market-maker brokerage

Knight

(NITE)

-- which warned this morning that it would miss earnings estimates -- were still putting pressure on the Nasdaq.

TheStreet.com

wrote a separate

story about Knight.

The

Dow Jones Industrial Average was doing better. It was actually rallying, but was lately off its session high of 10,830.72.

Financials

J.P. Morgan

(JPM) - Get Report

and

Citigroup

(C) - Get Report

were the heaviest drags.

Hawkins said that was worrisome because financials are usually leaders in rallies.

"It's an uncertain sign. It's hard to believe the market could rally without help from financials," Hawkins said. But he went on to say investors might just be taking a little off the top because they've been so strong lately.

Meanwhile,

Boeing

(BA) - Get Report

was rebounding after announcing a partnership with

BF Goodrich

(GR)

to develop a passenger-to-freighter conversion program for its 737 jetliner. The airplane maker's stock was recently sold off when it lost an important contract to competitor

Airbus

in Singapore.

Elsewhere, medical-equipment manufacturer

Guidant

(GDT)

and e-business company

Calico Commerce

(CLIC)

also warned about earnings overnight. Guidant was lately off 18%, while Calico was 28.9% lower.

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Sector Watch

Transport, cyclical and paper stocks were having a sunny day even though it was a gray day on Wall Street. Energy stocks weren't living up to their name and were dragging.

The

Dow Jones Transportation Average

was up 2.7%, lifted by airline stocks for a second day in a row, which in turn boosted the

American Stock Exchange Airline Index

, up 3%.

Delta

(DAL) - Get Report

was adding about 12 points to the transport index's average.

The

Morgan Stanley Cyclical Index

rose 2.5%, while the

Philadelphia Stock Exchange Forest & Paper Products Index

lately jumped 3.9%. Shared components

Georgia-Pacific

(GP)

and

International Paper

(IP) - Get Report

were both up.

Pick an energy sector, any energy sector -- they are all down, including the

American Stock Exchange Natural Gas Index

, off 2.6%,

Chicago Board Options Exchange Oil Index

, down 1.8%, and the

Philadelphia Stock Exchange Oil Service Index

, 3.7% lower.

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Bonds/Economy

Treasuries are mixed on little news, as the focus shifts from yesterday's

Federal Open Market Committee meeting to Friday's September

employment report. In keeping with the

Fed's aggressive stance on interest rates, short-maturity issues are faring worse than long-maturity ones. There are no major economic reports today.

In deciding to keep the

fed funds rate at 6.5% but also to maintain that the economy is still at risk of rising inflation, the FOMC

cited the high rate of labor-force utilization -- a.k.a the low

augmented unemployment rate -- as one of the major reasons why. The September jobs report will measure that rate anew. In August it stood at 6.9%, just off its all-time low (since the Labor Department began measuring it in 1994) of 6.8% in June.

The benchmark 10-year

Treasury note lately was down 7/32 at 98 30/32, lifting its yield to 5.893%.

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