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Today's Market: After Climbing at Open, Stocks Reverse Course

<LI>Good news from Nortel, Agilent not enough to ignite tech rally.</LI> <LI>Home Depot holds analyst meeting today.</LI>

(Updated from 9:49 a.m. EST)

After initially popping this morning, stocks were lately making a U turn into the red zone.

Nearly an hour after the open, the

Dow Jones Industrial Average was down 31.44, to 10,431.17, while the

Nasdaq Composite Index was hopping around the flatline, lately down 7.3 to 2868.3.

Today's initial bounceback was sparked by a couple of good catalysts in the earnings department. One of these catalysts was

Nortel Networks


, from the once white-hot networking sector. Nortel was lately up 3.2%. The other bearer of good tidings was

Agilent Technologies


(A) - Get Agilent Technologies Inc. Report

, which does business in a host of beaten-down tech sectors, such as communications, electronics, life sciences, opticals and semiconductors. Agilent was jumping 5.2%.

But this initial jump was lately fizzling out, and it was unclear whether the Nasdaq would be able to shake off its recent woes: Yesterday, the Comp sank to its lowest level in more than a year yesterday, closing down 151.5 points to 2875.6.

"In the short term, we're closer to a bottom," said Mayer Offman, chief trading officer at

Carlin Equities

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"We could get a bounce within the next 24 hours, but it will take more work before we can get a decent rally," he added.

Nortel, which makes equipment for communications companies, said last night it was "very confident" it would meet its operating earnings and revenue targets for the fourth quarter. The company also said it expects growth in its optical, wireless and Internet and e-business products to remain strong.

covered Nortel's news in a separate


This reassurance was much needed after the company hit a new 52-week low of $34.06 last Friday on concerns voiced by

Banc of America Securities

. Banc of America analyst Chris Crespi said that Nortel's customers began stockpiling optical equipment in the third quarter. And this was only the latest in a spate of recent bad news surrounding the networking sector. One of the last holdouts against the Nasdaq's autumn decline, the sector was initially thought by some to be immune to an economic slowdown. But the believers lost faith pretty quickly when Nortel revealed some weakness in its business in early November. Nortel was only the first of the networking stocks to warn, and stock prices in this sector have taken quite a beating in the past month as other signs of weakness accumulated.

While Nortel's reassurance looks good for the open, all eyes will be on the its meeting with analysts in Boston today.

Agilent was the market's other bright light this morning, meanwhile, reporting earnings of 66 cents a share, handily beating the

First Call/Thomson Financial

estimate of 53 cents and its year-ago figure of 39 cents. Agilent did announce some weakness in some areas of its business. (A separate


story gives a more detailed account of Agilent's earnings announcement.)

Watch the retailers today as

Home Depot

(HD) - Get Home Depot Inc. (The) Report

also has an analyst meeting.

Retailers have gotten a little boost lately as investors shed volatile tech stocks and after a few retailers managed to meet earnings expectations -- namely


(WMT) - Get Walmart Inc. Report



(TGT) - Get Target Corporation Report


But retailers have mostly been under pressure as several big sector players before Wal-Mart and Target warned of slowing earnings in coming quarters. Home Depot met earning estimates for the third quarter, but warned that its fourth quarter and fiscal 2001 earnings may be weaker than expected due to a more competitive retail environment.

It could also be a rocky day for financials after

Merrill Lynch

cut its earnings per share targets for asset management companies by an average of 7%.

At the End of the Day

But who knows where the index will end the day?

Wall Street has been trying to guess where the

Nasdaq will hit bottom for the past month, and each selloff has been followed by a bold rally. No one knows exactly how far the tech-heavy proxy may fall; some fear that the worst of the earnings slowdown is yet to come.

On the other hand, the Nasdaq is now 42% below its March peak -- which means stock valuations look pretty cheap at these levels.

The heady clip of the U.S. economy began to show signs of a slowdown a few months ago as it responded to the

Federal Reserve's six successive interest-rate hikes, begun last year. While no one fears another interest-rate hike in the near future, some Wall Streeters worry the Fed won't act quickly enough to cut interest rates. Without an interest rate cut, they say, the economy might not land on its feet, but will instead stumble into a recession.

Meanwhile, the elections quagmire continues to throw a long shadow over this market. Some expect a

Florida Supreme Court

decision on whether to include hand recounts in the final tally as soon as tomorrow. Yesterday, the markets swung higher, and then lower as the Republicans and then Democrats delivered compelling arguments to the court.

What the market wants most is some resolution on the matter.

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Bond prices were slipping this morning after a little bounce higher Monday and after data were released that showed the U.S. trade gap hit a new record in September. The benchmark 10-year

Treasury note was down 5/32 at 100 13/32, yielding 5.694%.

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European markets were rising near midsession, with Paris stocks showing the most muscle. In the U.K., stocks lost some of their earlier strength on news that the U.S. trade gap for September shot to a new record.

In London, the

FTSE 100

was up just 4.10 to 6349.10.

Over on the continent, the


in Paris was 30.07 higher to 6051.86 and the

Xetra Dax

in Frankfurt was up 10.57 to 6620.05.

The beleaguered euro was giving up a bit of recent strength, trading down at $0.8475.

Asian equity markets closed lower overnight.

Tokyo stocks sold off for the fourth straight session after Prime Minister Yoshiro Mori survived a no-confidence vote in parliament, strangling any hopes that a reform-minded government would take power and turn the economy. Hong Kong's blue-chips closed lower on weakness in telecoms and techs.

In Tokyo, the

Nikkei 225

slipped 123.19, or 0.85%, to 14, 408.46.

The greenback was lately trading higher to 109.95 yen.

Hong Kong's

Hang Seng

index slipped 158.36, or 1.03%, to 15,188.3.

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