(Updated from 3:04 p.m. EDT)

Investors didn't want technology today. The

Nasdaq sunk 129 to 4014, while industrial stocks rallied.


Dow Jones Industrial Average carried by

J.P. Morgan

(JPM) - Get Report

merger rumors, ended the day up 51 to 11,312.


S&P 500, was off 15 to 1492. The small-cap

Russell 2000 dropped 3 to 536.

TheStreet.com Internet Sector

index, or the

DOT, was down 23 to 846.

J.P. Morgan was up $7.81 to $167.75, adding to the positive lift to the 30-stock Dow average. Rumors circulated today suggest J.P. Morgan is in talks with

Deutsche Bank

, according to the German weekly


. J.P. Morgan officials declined comment, while Deutsche Bank officials were unavailable for comment.


American Stock Exchange Broker/Dealer Index

was up 0.857%.

On the other end, however, were the semiconductors, and more broadly, the rest of the technology sector.

DLJ analyst Boris Petersik downgraded

Micron Technology

(MU) - Get Report

to underperform from buy, citing price

weakness in the market for DRAM (dynamic random access memory). Micron was down 12.3%.

Analysts have been concerned about erosion in chip demand overall. The

Philadelphia Stock Exchange Semiconductor Index

was off 5.7%, thanks to significant losses in

TheStreet Recommends


(INTC) - Get Report



(XLNX) - Get Report


Texas Instruments

(TXN) - Get Report


The rest of the technology sector was getting tattooed with the chip stocks. The

Philadelphia Stock Exchange Computer Box Maker Index

was down 4.1%, and the

Nasdaq Telecommunications Index

dropped 2.7%.

Rising oil prices have contributed to a 3.7% surge in the

Philadelphia Stock Exchange Oil Service Index

. Lately, the price of crude oil futures traded on the New York Mercantile Exchange were trading at $34.66, the highest since the beginning of the 1990s.



has been halted at $7.88 today before a judge announced that the company had engaged in "willful" copyright infringement. The stock did not reopen for trading this afternoon.


Treasuries are marginally lower on little news, retreating further from the lowest-of-the-year yields they reached at the end of last week.

The benchmark 10-year Treasury note lately was down 8/32 at 100 6/32, lifting its yield to 5.726%.

With no major economic releases slated till the

retail sales report and the

Consumer and

Producer Price Indices next week, Treasury traders are mostly watching the corporate bond calendar. This fall, it is expected to be loaded with European telecom issues. As yet it isn't clear how much of the $40 billion of expected issuance will come in September.

Also of interest today,

Fed Governor Edward Kelley, in an interview with

Market News International

, said he continues to see the economy as running a higher risk of too-high inflation than of too-slow growth. A recent spate of weak economic reports has some economists thinking that the Fed, in its pronouncements after meetings of the

Federal Open Market Committee, might start describing those risks as balanced, indicating a lower likelihood of future rate increases.

Fed funds futures are discounting somewhat higher odds of a rate hike by the end of the year today than they were yesterday. The odds remain below 25% however.