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(Updated from 10:50 a.m.)

Following a nice recovery at the end of last week from six weeks of ruthless selling, this morning investors weren't sure whether to consolidate those gains or take stocks higher.

The major indices shifted gears several times at the open this morning, unable to settle on either side of the flatline, while volume was slim and breadth was mixed.


Dow Jones Industrial Average spent the later part of the morning firm in the green, while the

Nasdaq Composite Index was holding on to moderate gains.

Dow component and diversified industrial company

General Electric


was seeing selling pressure this morning following its announced agreement to buy fellow Dow member,



for $45 billion, as investors are concerned about the premium being paid for the company. GE was 5.1% lower to $49.56, eating some 16 points out of the Dow. But strength in Honeywell shares,



and in drug company



was countering that weakness.

Merck was rising on the heels of an upgrade from

Salomon Smith Barney

, which raised its rating to outperform from neutral.

The tech-heavy Nasdaq was having a harder time making headway, held hostage by









was one of the most actively traded stocks today after it said it is replacing CEO Richard McGinn with former chairman Henry Schacht and warned that first-quarter earnings would come in at break-even levels, marking its fifth straight earnings shortfall. Lucent shares were trading at barely a quarter of their high for the year after the company's failure to execute its business plan despite red-hot demand for telecom equipment. The stock was lately up 0.6%.

Cisco was off 81 cents to $56.44 following a report in


that the computer-networking equipment giant has been skewing its earnings reports over the last two fiscal years ended July. The journal said the company has avoided $18.2 billion in costs through a sneaky accounting technique.


has written several articles this year that are critical of Cisco's accounting practices.

Following middling earnings from optical networking company



, investors cooled to that sector. Corning was 6.8% lower, while

Juniper Networks


was off 2.1% and



was down 3.9%.

Instead, Wall Streeters were putting their tech cash into beaten-up tech bellwethers like



, Internet strongman

America Online


and semiconductor-maker

Texas Instruments



Corning beat earnings estimates by a penny with 35 cents a share. It maintained its forecasts for the year, which are at the low-end of analysts' estimates, but was more positive on expectations for next year.

Salomon Smith Barney

upgraded Corning to trading buy this morning.

But investors had raised their expectations for Corning, particularly following strong earnings results from fiber-optic suppliers






last Friday.

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Sector Watch

Semiconductors were continuing their rally of late last week, with the

Philadelphia Stock Exchange Semicondcutor Index

up 4.4%. Intel was rising 3.5%,

Micron Technology


was up 7.9%,

Applied Materials


was rising 6.7% and

Advanced Micro Devices


was 0.6% higher.

The computer makers were mixed following some mixed industry reports on future demand this morning.

Sun Microsystems


was up 1%, but









were all lower.

Financials were weak today, as were the energy stocks.

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The bond market continues to improve as funds move to safe investments in the face of international unrest.

The benchmark 10-year

Treasury note was lately up 3/32 to 100 29/32, pushing its yield down to 5.627.

With no economic releases today, there will probably be little news to cause any change in the market's view of bond prices. Mixed performance in equities and ongoing Mideast tensions are likely to continue to dominate the market's interest.

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