After shaking off bad news about technology for three days straight, investors were cautious this morning. With the release of data reminding people we're still in the midst of an economic slowdown and still more bad news about corporate profits flooding the air, the

Nasdaq Composite Index flipped from positive to negative territory.

This morning's

retail sales report showed a 0.2% drop in sales at U.S. retailers during March, compared with expectations they would rise 0.1%. The weakness was offset by the fact that February sales were revised to unchanged from an initial estimate of a 0.2% drop. For months now, consumers have generally been pulling back from the spending sprees that helped buoy the economy for the past several years.

On the heels of the retail sales news, retailer and

Dow Jones Industrial Average member

Wal-Mart

(WMT) - Get Walmart Inc. Report

warned that it expects first-quarter earnings to fall below analysts' expectations. That announcement counteracted a report from

General Electric

(GE) - Get General Electric Company (GE) Report

that its earnings for the most recent quarter met analyst expectations. The Dow -- which traded up earlier this morning -- lately sat with losses and is back below the psychologically key 10K mark.

In recent trading, shares of Wal-Mart fell 4.8% to $47.80, while GE's stock gained 1.6% to $43.95.

Further weighing on stocks this morning was news that consumer sentiment has continued to fall. The University of Michigan's closely watched

Consumer Sentiment Index fell to 87.8 in April from 91.5 in March. The number, a key measure of consumers' confidence about the economy, came in well below the 90.5 reading that was expected. While the level doesn't suggest a recession, it raises fears about the overall outlook for the economy and dashes some hopes the stock market will perform better in the near-term. Consumers, after all, account for two-thirds of all economic activity. When they are negative, they typically pull back their spending.

Whether or not the recent gains that sent the stock market higher over the past week will stick has been the subject of debate among Wall Street experts. While some pros think the advances were merely characteristic of bear-market rallies, others began to feel the market was close to a bottom.

Certainly, negative earnings news does not help make the case for sustained gains. But there have also been some glimmers of hope. Last night saw better-than-expected earnings reports from three tech leaders: notably

Yahoo!

(YHOO)

, handheld computing leader

Research in Motion

(RIMM)

TheStreet Recommends

(RIMM:Nasdaq - news) and networking hardware maker

Redback Networks

(RBAK)

(RBAK:Nasdaq - news).

But a second glance reveals a far less rosy picture. Yahoo!, Research in Motion and Redback all beat much-lowered estimates, while Yahoo! slightly dropped its forecasts for the rest of 2001 and announced layoffs. Yahoo was slipping 1.3% to $15.65. Research in Motion was jumping 14% to $25.01.

One day after an analyst upgrade on the semiconductor sector sent chip stocks rocketing higher, specialty chipmaker

Atmel

(ATML)

warned that second quarter earnings would come in below consensus estimates. In recent trading, the

Philadelphia Stock Exchange Semiconductor Index

was down 2.7%. Shares of

Intel

(INTC) - Get Intel Corporation (INTC) Report

fell 3.2% to $26.64, while

Cypress Semiconductor

(CY) - Get Cypress Semiconductor Corporation Report

, which warned earlier this week, was losing 2.9% to $17.16.

Bond prices were rising after a major selloff the past few days that was fed by gains in the stock market.

Also today,

Art Technology Group

(ARTG)

, which manufactures software applications, said that it would cut 12% of its workforce and take a charge in the second quarter.

Stock and bond markets are closed tomorrow for the long holiday weekend, so expect volume to be low today as investors and traders head out of town early. Lower trading volume can create more severe swings than are usual on a more typical trading day.