Today's equity market in some ways mirrored the performance of

Tim Meadows'

The Ladies Man

-- expectations were low to begin with, so negative breadth and a fractional gain in the

S&P 500 didn't come across all that badly.

After Friday's massive advances, analysts weren't surprised to see a lackluster session follow. Given the market's penchant to accentuate the negative and not even bother thinking about the positive, they didn't consider the middling session all that bad. Breadth was negative, but only barely -- and that's despite significant losses in big-cap technology and semiconductors.

Chip stocks and PC-related stocks sank today, after

Salomon Smith Barney

analyst Jon Joseph cut estimates and his price target on

Intel

(INTC) - Get Report

one day ahead of Intel's earnings report.

Despite the woes of significant big-cap bellwethers, including Intel and

Microsoft

(MSFT) - Get Report

, both of which hit 52-week lows, the Nasdaq Composite Index was resilient today. Intel, Microsoft,

Cisco

(CSCO) - Get Report

and

Oracle

(ORCL) - Get Report

all finished in the red, and yet the Comp lost just 26.42.

After several days of earnings-driven selling and increasing pessimism over prospects for future profit growth, analysts saw this day as a bit of good fortune. The indices generally ran in place, but they didn't lose any ground, which is what the market had gotten used to for the last month-and-a-half.

"In light of the fact that the core group is down pretty strong, it's a very good performance on Nasdaq today," said Tony Cecin, manager of Nasdaq trading at

U.S. Bancorp Piper Jaffray

.

That core group begins with Intel. The chip maker was hit with an earnings revision from Joseph, who first expressed worries about Intel and semiconductors in general in

July, when the market was starting to convince itself that the economic soft landing had occurred and the market was returning to paradise, especially in technology. Today, Joseph struck again, dropping earnings estimates and cutting his price target on Intel.

Intel lost $5.06, or 12.5%, to $35.69 today leading the

Philadelphia Stock Exchange Semiconductor Index

to a 5.8% loss today. Meanwhile, Microsoft dropped $2.63 to $50.38 today, a 4.9% loss, sending it to its lowest price since October 1998.

Analysts disagreed about the meaning of these losses in the bellwether technology stocks. Despite losing ground as investors aggressively revalue their expectations for earnings growth, these stocks are still overvalued significantly, some believe. Moreover, with continued concerns arising from the PC arena, those stocks have been stuck in a rut. The same goes for Cisco, which for many months was thought of as indestructible.

"The sentiment in the market had reached an extreme reading in numerous indicators and subsequently, the market had a pretty big bounce

Friday," said Steven Goldman, market strategist at

Weeden

. The rally's future will "depend on the earnings releases this week."

Investors attribute the mixed action, despite the lack of leadership, to a bit of value investing. The

Russell 2000 gained fractionally today; the

S&P Midcap 400 Index

rose 0.4%, and the

S&P Smallcap 600 Index

was up slightly as well. Those stocks have been among the best performers among equity indices this year; the Midcap Index has gained 13% this year.

The lackluster performance in the "horsemen" of the Nasdaq is pointed to as evidence that investors are moving away from these large-cap names and further into stocks representing the cutting edge of technology, such as fiber-optics and software storage. Because of the technological advantage these companies enjoy, investors are using them almost as defensive plays -- retreating to these stocks, knowing their earnings growth hasn't declined sufficiently to disappoint the market.

"It's a changing of the guard," said Paul Cherney, analyst at

S&P MarketScope

. "The former large-cap techs are on the way out. The initial selloff we had in the spring was Microsoft-led, and this one was really Intel-led."

Stocks that were up strong today included

Ciena

(CIEN) - Get Report

, gaining 6.3% to $135.19;

Corning

(GLW) - Get Report

rose 5.9% to $98.31, and

Veritas Software

(VRTS) - Get Report

gained 6.5% to $150.28.

Meanwhile, there were significant gains in the retail stocks today. The

S&P Retail Index

gained 3%. Investors returned to a couple of beaten-down names like Dow component

Home Depot

(HD) - Get Report

, gaining 3.8%, and

Wal-Mart

(WMT) - Get Report

TheStreet Recommends

, which rose 5%.

Oil stocks were weaker today after crude oil futures dropped sharply. The November crude futures slipped to $32.92 from $34.99, and the

Philadelphia Stock Exchange Oil Service Index

lost 3% today. One notable exception was Texaco, rising $3.88 to $59 after the announcement that

Chevron

(CHV)

would purchase the company, which, when

combined, would become the world's fourth-largest oil concern.

The folks at

Novellus

(NVLS)

, meanwhile, apparently like

subterfuge. They posted their earnings on their Web site prior to the close and later saying that the information was "false" (instead of posted mistakenly). Regardless, they were given the hammer, dropping $5.63 to $34.88.

Lastly, in what seems like it should be a regular feature,

Xerox

(XRX) - Get Report

was clobbered again, after continued worries that the company had tapped into a $7 billion line of bank credit, all the while asserting that "all is well" and "there's nothing to see here." The stock lost $2.69 to $7.75, or 26% of its value.

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Market Internals

Breadth was negative on moderate volume.

New York Stock Exchange: 1,375 advancers, 1,484 decliners, 1 billion shares. 35 new 52-week highs, 102 new lows.

Nasdaq Stock Market: 1,933 advancers, 2,068 decliners, 1.75 billion shares. 41 new highs, 192 new lows.

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Most Active Stocks

NYSE Most Actives

  • Xerox: 31.6 million shares.
  • Lucent Technologies (LU) : 20.6 million shares.
  • Motorola (MOT) : 17.8 million shares.

Nasdaq Most Actives

  • Intel: 90 million shares.
  • Microsoft: 57.7 million shares.
  • Cisco: 50.8 million shares.

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Sector Watch

The

S&P Biotechnology Index

gained 3.4%, while the

S&P Chemical Index

rose 1.8%. Elsewhere in the cubicle end of the tech sector, things were marginally higher.

TheStreet.com Internet Sector

gained 1.4%, despite significant losses in

Yahoo!

(YHOO)

, which lost 7.9% today. The

TheStreet.com E-Commerce Index

rose 4.7%.

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Bonds/Economy

Treasuries benefited at the end of last week as a result of the renewed Middle East violence, which gave the bond market enhanced appeal as a safe haven.

Not so today. Although the overseas currency and equity markets showed greater stability, the bond market was flat. The benchmark 10-year note ended the day at 100 3/32, up 2/32, yielding 5.736%.

Further indications that oil price pressures may be falling came in a statement by the Saudi oil minister, who suggested that if oil prices remain above $28 per barrel,

OPEC

may increase output quotas. Today oil prices dropped to $32.92, a $2 decline.

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International

Tech and telecom stocks were mixed in Europe.

London's

FTSE 100

rose 76 to 6285.00, closing amid strength. The

CAC 40

in Paris rose 24 to 6088, while the

Xetra Dax

in Frankfurt had plunged into the red, off 62 to 6599.

The major Asian equity markets ended solidly higher Monday, as technology shares were buoyed by the Nasdaq's strong action on Friday.

Tokyo's

Nikkei 225

closed up 182.0, or 1.2%, at 15,512.3.

In Tokyo trading, the dollar traded fractionally down to 107.85 yen. The greenback was lately trading at 108.27 yen.

Elsewhere, South Korea's stock market surged more than 7% early on, before trimming those gains by the close. The

Kospi

index ended up 25.5, or 4.9%, at 550.1. Hong Kong's

Hang Seng

index rose 292.9, or 2%, to finish the day at 14,973.4, reversing a similar percentage drop from Friday.

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