Today's Market: It's Not Pretty -- Nasdaq Drops Again - TheStreet

(Updated from 9:38 a.m.)

The market wasn't in a very celebratory mood on this, the 10th anniversary of the Bull Market. Quite the opposite. Things were downright ugly for the open.

The bulls are technically still in the lead, but the way stocks have been hacked apart in recent weeks, it's starting to feel a lot more like the bears have crashed the party.

The

Dow Jones Industrial Average lately switched direction after earlier losses, gaining 20 to 10,544. The

Nasdaq Composite Index was ailing. It was 61 lower to 3179, flirting near the May 23 closing low of 3164.55. And the

S&P 500 moved 12 lower to 1376.

There are only four new highs on the Nasdaq this morning. One of them is

Green Mountain Coffee

(GMCR)

. On days like this, everyone needs coffee.

Another earnings warning last night from a tech bellwether -- just when it seemed the warning season was over -- didn't help. Tech infrastructure company

Lucent

(LU)

warned last night that earnings would be 25% to 29%

lower than expected. Lucent was 32.3% lower this morning. After several high-profile companies

warned they would miss earnings estimates in recent weeks -- and as earnings season kicked off this week, the market has been hoping to finally get some good news.

But it seems that no news may be good enough news for this market. Internet titan

Yahoo!

(YHOO)

decisively

beat earnings estimates and the

whisper number last night. But investors were taking the stock down 12.5% this morning after the company expressed concern over the weak euro and future sales growth.

Telecommunications company

Motorola

(MOT)

, which yesterday reported earnings in line with estimates, was also trading lower, down 21.9% in early action.

TheStreet.com

wrote a

separate story about Motorola.

Crude oil prices, in the meantime, continued to soar -- no encouragement for a market jittery over earnings, slowing consumer demand and inflation. Higher oil prices have been blamed in part for some companies' earnings weakness, as rising oil prices drain consumer pocketbooks and help push up consumer and corporate prices.

Some think that if the stench of fear becomes strong enough, selling will accelerate to the downside and stock prices will get so low that fund managers will come in to buy, creating a V-shaped bottom off which stocks can bounce back into the heavens. This is often called a "capitulation." But others don't think it will be quite that easy and see little to take the market higher in the near term.

"I don't see anything that will prop this market up in the near term," said Paul Rich, trader at

BT Brokerage

.

Market watchers were also hoping earnings season would yield some positives. But maybe it will take some inspiring words or action from the

Fed on inflation and interest rates. The Fed next meets in November.

Earnings reports to watch today include releases from semiconductor

Advanced Micro Devices

(AMD) - Get Report

and diversified industrial firm

General Electric

(GE) - Get Report

. Semiconductor bigwig

Applied Microcircuits

(AMCC)

and biotechnology firm

Genentech

(DNA)

are also scheduled to report.

TheStreet.com

wrote a separate story about

GE's earnings, which were in-line with expectations.

AMD fell 1.1% this morning, on the heels of

Lehman Brothers

and

Salomon Smith Barney

downgrades yesterday on chipmakers

Altera

(ALTR) - Get Report

and

Xilinx

(XLNX) - Get Report

. The negative comments helped slice a hefty 10.1% off the

Philadelphia Stock Exchange Semiconductor Index

, known as the SOX. The index was off another 1.4% today.

Biogen

(BGEN)

said it beat analyst earnings by a penny. We took a look at the news from Biogen in a

separate piece. Still, investors were driving the stock lower. It was lately down 6.8% in early action.

Upscale retailer

Nordstrom

(JWN) - Get Report

could hurt its retailing brethren today. The company this morning warned that its earnings would not make estimates due to softer-than-expected sales and bigger-than-planned markdowns. Investors were concerned that a slowdown in consumer demand and (warning -- here comes another "blame the weather" excuse) a mild summer would have hurt retail sales. But retail stocks have been in the dumps pretty much all year. Nordstrom was 6.4% lower this morning.

So is it safe to play anywhere in this minefield?. Defensive stocks are getting the runoff from tech right now. But if and when the Nasdaq does turn, whoever has hidden cash in transports, utilities and drugs better be ready to jump, because money may come out of those sectors pretty fast.

In other news today, the European Union decided to give the green light to the

America Online

(AOL)

and

Time Warner

(TWX)

merger on the condition that AOL sever all ties with

Bertelsmann

and

Vivendi

(V) - Get Report

. AOL was off 2.6%. Time Warner was off 2.8%. And Vivendi was 1.6% lower.

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Bonds/Economy

The benchmark 10-year Treasury was up 9/32 at 99 29/32, yielding 5.764%.

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International

The Nasdaq's dismal and continued slide had

European stocks reeling at midsession as they racked up triple-digit losses.

London's

FTSE 100

was down 117.30 to 6130.40.

The

CAC 40

in Paris was off 167.70 to 5975.60, while the

Xetra Dax

in Frankfurt was falling 151.70 to 6521.45.

The euro was lately inching higher to 0.8726. In the past week, the euro has been eking out some meager gains, but it basically remains in the dumps.

The major

Asian equity markets got slammed Wednesday as investors fled technology shares after semiconductor stocks plummeted in the U.S. on Tuesday.

In Japan, the

Nikkei 225

closed down 314.2, or 2%, at 15,513.6.

In Tokyo trading, the dollar traded down to 107.86 yen from 108.51. The greenback was lately trading at 107.885.

Elsewhere, Taiwan's

TWSE

index fell 168.9, or 2.7%, to 6040.6, after investors returned from a holiday Tuesday. Hong Kong's

Hang Seng

index fell 427.1, or 2.8%, to 15,127.0. Index leviathan

China Mobile

(CHL) - Get Report

continued a massive three-day losing streak, falling HK$2.00, or 3.6%, to 53.50 ($6.86).