The battering continues in the stock market today, as another massive selloff in the optical and networking stocks has the

Nasdaq Composite Index nearing the Oct. 12 intraday low of 3074. The catalyst is yesterday's warning by

Nortel Networks

(NT)

, which is experiencing another day of sharp declines.

Meanwhile, the

Dow Jones Industrial Average and the S&P 500 are sagging -- the Dow has been jumping around on both sides of the flatline all day -- as selling spreads to other sectors of the market. In the last two months, the market has undergone an aggressive revaluing of the sectors with the highest valuations, specifically semiconductors, telecommunications, and the fiber-optics companies. However, with many of these stocks having dropped sharply, there's little motivation for investors to buy them due to an uncertain economic picture.

Nortel, a networking and fiber-optics company, and a direct competitor to

Cisco

(CSCO) - Get Report

, was one of those companies expected to show incredible demand for its products. Sales growth on a year-over-year basis was 90%, which was good, but not what the market was hoping for. The stock is down 2.2% to $43.88 today, while

Juniper Networks

(JNPR) - Get Report

is off 10.5% to $175.

The market is hoping to see a strong earnings release out of

JDS Uniphase

(JDSU)

, a fiber-optics company, to perhaps cauterize the market's wounds. The company reports earnings after the close. The stock was lately down 1.2%.

Intel

(INTC) - Get Report

and

Microsoft

(MSFT) - Get Report

, however, which were soundly trashed in September, are stronger today, as some feel those stocks have reached bottom.

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Sector Watch

The brokerage stocks are continuing to suffer on continued concerns that underwriting fees will decline and hurt earnings in the coming quarter. The

American Stock Exchange Broker/Dealer Index

was lately down 2.8%. The

TheStreet Recommends

Philadelphia Stock Exchange/KBW Bank Index

was down 2.5%, and insurance stocks were also getting hammered. The

S&P Insurance Index

fell 4.7%.

Pockets of strength have to exist somewhere, right? Well, they do. The

Dow Jones Transportation Average

is stronger today, gaining 1.3%.

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Bonds/Economy

Bonds are up today, following a down day yesterday.

The benchmark 10-year

Treasury note was lately at 100 21/32, up 7/32, to yield 5.659%.

The 30-year

Treasury bondis at 107 20/32, 17/32 higher, to yield 5.711%.

Economic data this morning were relatively benign.

The

Employment Cost Index

(

definition |

chart |

source

) for the third quarter rose 0.9%, after a 1.0% gain in the prior quarter. A 1% increase had been expected.

initial jobless claims

(

definition |

chart |

source

) for the week of October 21 were lower at 305,000, from 310,000 in the previous week.

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