The Dow Jones Industrial Average continued to limp downward after yesterday's hot inflation data broke its legs, but the Nasdaq Composite Index was still bucking upward in relatively thin trade.

Investors began fleeing the so-called "inflation-sensitive" old-economy stocks yesterday as they sought cover in "high-growth" tech stocks. So far that trend has held.

Most market observers said the fact that the Nasdaq has been able to hold its head high amid the recent flutter of bad news is very impressive and bodes well, at least for the short term.

That bad news includes a report earlier today that George Soros' firm is losing

Stanley Druckenmiller

and

Nicholos Roditi

, which some thought might mean some heavy selling in tech.

Druckenmiller ran Soros' $8.2 billion

Quantum Fund

and Roditi ran the $1.2 billion

Quota Fund

. The two managers had bet heavily on technology names starting in the latter half of 1999. The recent selloff in tech names hurt the fund badly -- it reportedly lost $3 billion in capitalization in the last six weeks.

For more on this

story, take a look at the coverage out of the

TheStreet.com/NYTimes.com

joint newsroom.

One stock, in particular, was really singing the blues today.

In the last hour, a federal judge in New York ruled that

MP3

(MPPP)

violated copyright laws by creating a database of music available to be downloaded off the Web. The ruling has hammered the stock and it was recently down 4 5/8, or 40%, to 7.

"For a Friday, going into a weekend, and having digested a lot of bad news, it's very impressive that the market has been able to hang in this tough so far," said Ned Collins, executive vice president of U.S. stocks at

Daiwa Securities America

.

But no one wants to say that the market has moved entirely out of the woods yet as there may be more bad news to be weathered.

"Next week everyone will be keeping an eye on the April employment data. Market players are sitting boxed in by that data. We may see activity slow down in the afternoon after the harrowing week we've had. And we could see tech back-and-fill a little bit more," said Bryan Piskorowski, market analyst at

Prudential Securities

.

Financials and insurance stocks were still taking blows after falling hard on the inflation news yesterday. The

American Stock Exchange Broker/Dealer Index

was down 1.4%, the

Philadelphia Stock Exchange KBW/Bank Index

was down 2.2% and the

S&P Insurance Index

was 1.3.

Leading financials down around mid-session were

Citigroup

(C) - Get Report

, down 2.6, and

American Express

(AXP) - Get Report

, down 0.9%.

Fellow Dow industrials components

J.P. Morgan

(JPM) - Get Report

was down 1.9% and

Chase Manhattan

(CMB)

dropped 1.4%.

Insurance giant

American International Group

(AIG) - Get Report

was off 1.5%.

On the NYSE,

Three-Five Systems

(TFS)

was off 8% and

Mettler-Toledo Int'l

(MTD) - Get Report

off 14.6%, were posting the biggest losses.

The Nasdaq was getting extra bounce, meanwhile, from

Aether Systems

(AETH)

, and

Rambus

(RMBS) - Get Report

.

Rambus' gain was also propelling the

Philadelphia Stock Exchange Semiconductor Index

up 3.2%.

Technology bellwether

Intel

(INTC) - Get Report

was up 2.1%, after the chip giant reported Thursday it is accelerating its efforts to promote the growth of electronic commerce. Other chip makers, such as

Texas Instruments

(TXN) - Get Report

and

LSI Logic

(LSI) - Get Report

were riding Intel's wave.

Meanwhile,

Microsoft

(MSFT) - Get Report

was down 1.4% ahead of the release of the government's proposal for splitting up the company after the market closes this afternoon.

Consumer retail stocks were also in trouble, as were drug stocks. And utility stocks were down after a strong run up in the last few weeks. The

American Stock Exchange Pharmaceutical Index

was off 1.7%, and the

Dow Jones Utility Average

was off 1.3%.

The Street.com Internet Sector

index was up 35.48 to 892.45, once again, boosted by strength in

Yahoo!

(YHOO)

and

CMGI

(CMGI)

.

Market Internals

Breadth was narrowly mixed on the NYSE and positive on the Nasdaq, while volume was relatively light on both.

New York Stock Exchange:

1,424 advancers, 1,351 decliners, 553 million shares. 41 new 52-week highs, 30 new lows.

Nasdaq Stock Market:

2,200 advancers, 1,634 decliners, 882 million shares. 33 new highs, 60 new lows.