(Updated from 9:28 a.m.)

So where will the networking stocks take us today?

So far, it looks darn good. Fiber-optics leader

JDS Uniphase

(JDSU)

last night issued a bullish outlook for coming quarters as part of its third-quarter

earnings report. And tech stocks were moving higher when the market opened.

But hey. Handle with care. The past week has been plagued by levels of volatility not seen in some 10 years. Some analysts are skeptical of the mismatch between

Nortel

(NT)

and JDS Uniphase's numbers. (

TheStreet.com

earlier wrote about

Nortel's earnings.)

And this morning's

gross domestic product figures revealed a sharp slowdown in economic growth in the third quarter.

The third-quarter GDP number, which was the lowest since the second quarter of 1999, certainly bodes well for the end of the

Federal Reserve's interest-rate-hiking cycle -- which Wall Street has been anxiously awaiting. But it could fuel concerns that the Fed's interest-rate program is slowing the economy too far, too fast. GDP grew at a rate of 2.7% in the July to September quarter, vs.

Reuters

consensus estimates of 3.4%. For more on the GDP, read a separate

piece on

TheStreet.com

. We also recently wrote about the kind of impact an economic slowdown would have on

earnings growth.

The

Dow Jones Industrial Average was gaining 44 to 10,425. The

Nasdaq Composite Index headed 71 higher to 3343. And the

S&P 500 moved 11 higher to 1375.

But back to networking stocks. JDS reported strong third-quarter earnings yesterday after the close. But more importantly, the company's chief executive officer made extremely bullish comments about optical demand going forward. In fact, Chief Financial Officer Anthony Muller strongly encouraged analysts to increase their revenue and earnings estimates for JDS in its current fiscal year, which ends June 30. Investors were sending that stock up 12.5% in early action.

Among the most recent of Wall Street's tech darlings, the networking stocks flattened the Nasdaq Wednesday and then took it on a roller coaster ride Thursday. Such stocks include fiber-optics stocks such as JDSU,

Corning

(GLW) - Get Report

and

Ciena

(CIEN) - Get Report

, as well as networking infrastructure makers such as Nortel,

Cisco

(CSCO) - Get Report

and

Juniper Networks

(JNPR) - Get Report

. All these companies were seeing their stocks gain this morning.

Nortel, one of the group's leaders, was responsible for most of the damage after it warned of slowing optical sales Tuesday after the market close. Yesterday, worries over JDS' earnings took a three-digit bite out of the Nasdaq. But rumors that the earnings would come in strong turned the tech-heavy index around mid-afternoon, and it ended up more than 40 points.

While JDS' earnings and bullishness were a relief, some analysts counsel caution. On closer inspection, Nortel and JDS numbers don't match up. And eventually, slowdowns at the big equipment suppliers and network builders such as

Williams

(WCG) - Get Report

,

AT&T

(T) - Get Report

and

Worldcom

(WCOM)

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should take their toll on their suppliers.

Expect some damage in the biotechs today after

Amgen

(AMGN) - Get Report

reported weak earnings last night.

TheStreet.com

wrote a separate

story on Amgen's earnings. It was off 9.6%.

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Bonds/Economy

Bonds initially rallied after the GDP numbers were released, but then fell back.

The benchmark 10-year

Treasury note is at 100 12/32, down 1/32, to yield 5.696%.

The 30-year

Treasury bond is 2/32 lower to 107 8/32, yielding 5.738%.

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International

European markets were soaring near midsession following JDS' strong earnings release Thursday.

The

FTSE 100

in London was up 84.10 points to 6386.40.

The

CAC 40

in Paris was 99.39 higher to 6307.81, while the

Xetra Dax

in Frankfurt was up 161.86 to 6929.76.

The

battered euro was climbing back after falling to new lows yesterday, lately at 0.8327.

The major

Asian equity markets ended lower Friday, as technology shares closed out the week with a whimper.

In Tokyo, the

Nikkei 225

closed down 276.2 points, or 1.9%, at 14,582.2, as tech bellwether

Sony

(SNE) - Get Report

suffered heavy losses after posting disappointing earnings.

In Tokyo trading, the dollar traded up 0.13 to 108.37 yen. The greenback was lately at 108.77.

Elsewhere, Taiwan's

TWSE

index fell 136.7, or 2.3%, to 5805.2, as chip-making giant

Taiwan Semiconductor

(TSM) - Get Report

fell 3.3%. South Korea's

Kospi

index slid 8.3, or 1.6%, to 515.3.

Hong Kong's

Hang Seng

index dipped 93.8, or 0.6%, to 14,902.5, as

Pacific Century CyberWorks

(PCW)

fell 0.8% to HK$6.00 ($0.76) and

China Mobile

(CHL) - Get Report

rose HK$0.50, or 1%, to 52.75.

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