Just as this market has seen a lot of unconvincing up days, this is an unconvincing down day. Volume is poor, and internals are only slightly negative, though most major averages are steeped in the red. For traders, it's a positive for the market to hold in reasonably well after a strong advance yesterday.

Lately, the

Dow Jones Industrial Average

was down 16 to 10,795, while the

Nasdaq Composite Index

was off 22 to 3936. The

S&P 500

index was down 4 to 1464. But volume has been dreadful thus far, with just 631 million shares traded on the

New York Stock Exchange

, and 869 million changed hands on the

Nasdaq Stock Market

.

Traders attribute the lack of volume to a bit of a news vacuum in the marketplace for these next couple of days. Most earnings reports are behind the market, and the stock market is anticipating several important economic releases, including Friday's

employment report, to point the market in a direction as it approaches the May 16

Federal Open Market Committee meeting.

Because of that, the market is witnessing a bit of rotation into a couple of sectors that have been reasonable strong the last few days, including the retailers and the natural gas stocks. Assorted technology stocks remain strong, while investors are selling financial stocks and big-cap technology names.

"We're focusing on the same news, day in and day out," said Randy Billhardt, co-head of block trading at

PaineWebber

. "The big news is

Microsoft

(MSFT) - Get Report

, and what's going to happen at the next FOMC meeting next week. We had a great day and today there's a bit of a pullback, but in light of what's transpired the last few weeks, the market acts tremendously well."

The

Nasdaq Stock Market's

most active was Microsoft, down 2 5/16 to 71 1/8 on 31.7 million shares. Big-cap technology stocks were mostly lower, including

Dell

(DELL) - Get Report

,

Sun Microsystems

(SUNW) - Get Report

, and

Cisco

(CSCO) - Get Report

. The

Morgan Stanley High-Tech 35

was down 0.6%. The

Russell 2000

was lately up a fraction to 519.

One of the major stocks with news was

AT&T

(T) - Get Report

, the most actively traded on the

New York Stock Exchange

. The Dow component reported solid first-quarter earnings but warned of weakness ahead, and lately the stock was off 7, or 14.3%, to 42 on 46.7 million shares traded. (

TheStreet.com/NYTimes.com

joint newsroom covered the news in a

story this morning.)

Investors took profits in financial stocks after a good day yesterday.

J.P. Morgan

(JPM) - Get Report

was down 1.1%,

Merrill Lynch

(MER)

fell 1.3% and

Charles Schwab

(SCH)

was down 1.8%. The

American Stock Exchange Broker/Dealer Index

fell 2.1%, but the

Philadelphia Stock Exchange/KBW Bank Index

gained 1.1%.

Natural gas stocks continued to perform well after a strong day yesterday, as the price of natural gas continues to rise. June natural gas futures lately rose to $3.19 per million BTUs, up from about $2.27 at the beginning of the year.

Enron

(ENE)

was up 5.1%, while

Apache

(APA) - Get Report

gained a more modest 0.4%.

Other commodity-related indices were performing well. The

Philadelphia Stock Exchange Oil Service Index

rose 2.9%, while the

American Stock Exchange Oil and Gas Index

gained 1.2% and the

S&P Chemical Index

was up 2.1%.

A number of retailers continued to perform well, including

J.C. Penney

(JCP) - Get Report

, up 13.6%,

Sears

(S) - Get Report

, which gained 1.8%, and Dow component

Home Depot

(HD) - Get Report

, which had been beaten up lately, gaining 2.2%.

"There's almost some bargain-hunting on things beaten up," said Eddie Laux, head of equity trading at

ABN Amro

. "J.C. Penney looks like it's kind of bottomed and is looking for higher prices. I'd almost dare to say you'd put

Philip Morris

(MO) - Get Report

in that category. It acts like a million bucks all of a sudden... those stocks that have been dregs of the earth have a better tone on better volume."

Philip Morris was lately up 3.5%.

Laux and Billhardt said the methodical pruning of tech positions and strength in commodity-related stocks and other overlooked sectors was a response from investors to diversify a little bit at a time when the overall market isn't running wild.

With so much expected in the next few days, traders termed this a brief respite from the extreme volatility that the market experienced throughout the entire months of March and April. Of course, it wasn't long ago that a billion-share day on the Nasdaq was about average, rather than below average.

"Maybe it's people catching their breadth from April's roller-coaster ride," said Laux. "They can do a little thoughtful deliberation about what they want to do next. People are thinking more about their longer-term outlook -- 'what stocks we want to position ourselves for in the portfolio?'"

Internet stocks are reasonably stronger today.

TheStreet.com Internet Sector

index was lately up 7, or 0.7%, to 926, led by the likes of

Check Point Software

(CHKP) - Get Report

, gaining 2.8%, and

Open Market

(OMKT)

, up 18.3%.

BroadVision

(BVSN) - Get Report

was one of the day's most active, up 16.4%.

Market Internals

Breadth was negative on modest volume.

New York Stock Exchange

: 1,394 advancers, 1,467 decliners, 631 million shares. 46 new highs, 36 new lows.

Nasdaq Stock Market

: 1,796 advancers, 2,117 decliners, 869 million shares. 30 new highs, 44 new lows.

For a look at stocks in the midsession news, see Midday Stocks to Watch, published separately.