The comeback kids spent the morning waiting for a cue, and it looked like they had one on the tech side at midsession despite the evaporation of early rally attempts.

After a somewhat strong opening, both the

Nasdaq Composite Index

and the

Dow Jones Industrial Average

lost their conviction and were swinging about in search of direction. The tech-laden Comp found some and lately was up 40, or 1%, to 4189, near its session highs, while the blue-chip average was down 78, or 0.7%, to 11,086.

TheStreet.com Internet Sector

index had recovered from earlier pressure, up 9 1/2, or 1%, to 980.

Yesterday's roller-coaster ride -- during which investors witnessed the wildest point swings in market history -- is still casting a shadow over today's action. The Nasdaq Comp plummeted about 575 points before it reversed course and ended the day with a relatively modest 74-point drop, while the Dow also rebounded after a more than 500-point loss and ended the day off 57 points.

"Everyone is tentative and looking for direction and I'm not sure there is one right now," said Tony Cecin, manager of Nasdaq trading at

U.S. Bancorp Piper Jaffray

. "The Comp has been up and down this morning and its still trying to get some legs." Still, he said, some buyers are beginning to dip around the tech sector in search of bargains.

Others were still busy digesting the impact of yesterday's moves. "It's an uneventful day relative to expectations," said Dan Ament, assistant vice president and investment executive at

Dain Rauscher

in Minneapolis. "A lot of people expected the market to come back down and test lows." Ament said that despite some investors taking advantage of this dip to buy, the selling pressure seems to be winning out so far.

The

S&P 500

index was down 2, or 0.1%, to 1493, while the

Russell 2000

was bouncing back with a gain of 6, or 1.1%, to 512.

Strength was scattered randomly across sectors. The

Nasdaq Biotechnology Index

was lately up 6.8%.

Amgen

(AMGN) - Get Report

was sporting an 8.5% gain, while

Biogen

(BGEN)

was up 8.9%.

Transportation stocks were strong, with the

Dow Jones Transportation Average

up 2.7% and the

American Stock Exchange Airline Index

up 3.4%.

Meanwhile, plenty of sectors were subdued or under selling pressure, including financials, telecommunications and consumer products. The

American Stock Exchange Broker/Dealer Index

was down 0.6%, while the

Nasdaq Telecommunications Index

was off 0.3%. Losers included

Nortel

(NT)

and

Nextel

(NXTL)

.

The

Morgan Stanley Consumer Index

was off 1%.

Coca-Cola

(KO) - Get Report

was sporting a lot more red than usual, down 6.6%. The Dow component was also contributing more than 12 points to the industrial average's downturn.

In the bond market, the 10-year Treasury was up 8/32 to 104 25/32, its yield at 5.85%.

Despite the hesitancy and caution which has marked today's trading so far, market observers expressed near- and long-term optimism about overall prospects going forward. "I think if we can get the margin calls out of the way without sending the market down again, that is probably a positive, " said Cecin.

"If anything, this should provide some consolidation or support," said Ament. Faith in some of the more speculative Internet investments has been shaken. That is probably a good thing." Ament thinks we are going to see strong quarterly earnings based on the dearth of preannouncements and said he expects "good upside for the long term."

Market Internals

Breadth was negative, particularly on the Nasdaq, on moderate volume.

New York Stock Exchange:

1,372 advancers, 1,428 decliners, 643 million shares. 10 new 52-week highs, 35 new lows.

Nasdaq Stock Market:

1,942 advancers, 2,058 decliners, 1.1 billion shares. 16 new highs, 95 new lows.

For a look at stocks in the midsession news, see Midday Movers, published separately.