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Today's Market: Nasdaq Bounces Back, but Dow Drags Lower at Open

<LI>High oil, weak Euro remain concerns.</LI> <LI>Vodafone receives bids for Internet unit.</LI> <LI>Credit Suisse First Boston ups Solectron's price target.</LI>

Updated from 9:27 a.m. EDT

Investors are staging a bit of a recovery in the tech stocks this morning. Money managers may want to search for bargains in what already looked like an oversold market to some.

In early going, the

Nasdaq Composite Index gained 41 to 3937. The

Dow Jones Industrial Average, however, fell 41 to 11,154. And the

S&P 500 moved 5 higher to 1494.

"It looks like we might get a little pop on the Nasdaq after two days of selling ...The short-term bias is overdone on the Nasdaq," said Peter Coolidge, managing director of trading at

Brean Murray Foster Securities.

Then again, don't expect steady summer-like gains. September is typically a pretty rough month for stocks, and at least one bearish trader thinks the market could still wipe out its entire August rally. It's earnings preannouncement season after all, which is doing its best to ruffle feathers, again. And a strong dollar and runaway oil prices are only aggravating earnings jitters.

"The trend does seem down in the month of September. If we do get a bounce, how long it will last is the question. People are worried longer term about warnings for fourth quarter. The Street's looking for clues as to how third-quarter earnings will come in," he said.

"I think it's just going to be a technical bounce. I don't want to read too much into this," Coolidge added.

Meanwhile, so-called triple witching happens this Friday, which should generate some wild swings this week. Triple witching is the expiration of equity options, index options and futures contracts. It happens on the third Friday of every third month -- and it often creates volatility.

Oil drillers could get some upside today after

Banc of America Securities

pushed them in a research note this morning. After the Venezuelan oil minister Ali Rodriguez said overnight that


is fast running out of production capacity, crude oil prices are again nearing 10-year highs hit last week. OPEC announced Sunday that it planned to increase daily output by 800,000 barrells a day.

Custom electronics maker



may serve in part as a catalyst for tech stocks today after its 12-month price target was raised to $60 by

Credit Suisse First Boston

this morning and

Merrill Lynch

made some bullish comments on the company in its research note. The company last night announced fiscal fourth quarter earnings above analyst estimates. Its announcement came just before the closing bell, when it finished the day lower at $48.50 on the day.

PRI Automation


won't be giving any help to chip stocks though. The chip industry supplier said last night that it expected to miss fourth quarter earnings forecasts by far. PRI Automation was getting whipped in pre-open trading and in Europe.

Other hot numbers today should include U.K. mobile-phone operator


(VOD) - Get Vodafone Group Plc Sponsored ADR Report

, whose


unit received two formal bids for its Italian Internet operation


. One of these bids was worth about $10 billion,

The Wall Street Journal


wrote a

separate story on the bids. Vodafone was 1.2% higher in early trading.

And financials should remain in the spotlight today. A buzz of takeover rumors gained new credence yesterday after

Goldman Sachs

confirmed its acquisition of

TheStreet Recommends

Spear, Leeds & Kellogg

, giving financial stocks a boost Monday. Brokerage stocks were soaring yesterday.


Dresdner Bank

is apparently in talks to buy U.S. investment bank

Wasserstein Perella

in a deal that could be worth between $1.2 billion and $1.5 billion,

The Wall Street Journal


wrote more about the talks in a

separate story.

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The 10-year Treasury note was lately recovering slightly from yesterday's selloff, up 1/32 at 99 27/32, and yielding 5.770%.

Yesterday, a big rebound in oil prices and the specter of a flood of new corporate bonds put pressure on Treasuries.

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European markets were tumbling this morning as they tried to catch up with yesterday's Nasdaq selloff.


FTSE 100

was lately 15.00 lower to 6567.00.

Across the channel, the

CAC 40

in Paris was off 32.53 to 6642.48, and the

Xetra Dax

in Frankfurt was off 53.41 to 7161.04.

The euro was lately trading lower at $0.8615.

recently wrote a separate piece looking at the

euro's woes.

Asian markets added to their Monday losses overnight.

Tokyo traders cautioned that it has room to fall as investors hurry to book profits before their fiscal first-half books close at the end of September. The

Nikkei 225

index shed 90.67 to close at 16,040.23.

The greenback barely budged against the yen in Tokyo trading to 106.21. The dollar was lately trading at 106.28 yen.

Hong Kong's

Hang Seng

index fell 378.20, or 2.2%, to close at 16,629.78 as investors opted to close out positions before a public holiday Wednesday. Index heavyweights got pummeled, including

Pacific Century Cyberworks


, down HK$0.50, or 4.0%, to 12.15 ($1.56) and

China Mobile

(CHL) - Get China Mobile Limited Sponsored ADR Report

down 1, or 1.7%, to 58.

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