Stocks were dipped in red at midday as investors fretted about corporate profits and higher energy prices. Meanwhile triple-witching was working a little September voodoo of its own.

Both blue-chips and techs spent the morning underwater, though techs were definitely submerged a bit deeper with the

Nasdaq Composite Index down 57 to 3857, and the

Dow Jones Industrial Average off 17 to 11,070.

"We're a little bit on the razor's edge today, with investors unsure because of triple-witching. There are a lot of near-term crosscurrents of uncertainty and skepticism," said John Zimmerman, director of growth strategies at

Banc of America Capital Management

in St. Louis.

Triple-witching, or the expiration of equity options, index options and futures contracts, often whips up a little extra volatility for the market mix.

Big Data Day

This morning's release of a fresh round of benign economic data in the form of the

Consumer Price Index


industrial production and capacity

report was examined with a yawn and tossed to the sidelines.

August's headline CPI came in at a 0.1% drop vs. expectations of a 0.2% rise, while the core -- which is minus food and energy -- was right in line with expectations at a 0.2% jump. The numbers are further evidence of tame inflation, though the good news was dragged down by a drop in energy prices, which have since risen. The CPI measures consumer inflation.

Industrial production was stronger-than-expected. The market had expected a slight drop in manufacturing, and economists were estimating it would remain unchanged, according to


consensus forecasts. But the number came in up 0.3%, while capacity utilization remained at 82.3% versus expectations it would pull back to 82.0.

The latest numbers just emphasized the point of "inflation as being non-existent," said Zimmerman. "There are even rumblings of potential

Fed easing starting to get into the market psyche. It is a soft landing," he added.

Still, that wasn't inspiring much confidence in the market today. The action in


(ORCL) - Get Report

, which by any conceivable measure, delivered a solid earnings report, is indicative of the unforgiving mood investors are currently in. The stock is lately down 4.9%. "People looked at the revenue numbers and were a little less convinced. Again, you're looking at a stock that's priced for perfection. Even in line with perfection is unacceptable," said Zimmerman.

The software giant's strong earnings release after the close yesterday was tempered by slower-than-expected applications software sales, which disappointed some analysts. In addition, the latest round of earnings jitters seems to be providing investors with an excuse to take some money off the table after the Nasdaq's hot streak in August.

"The true path of the market should start Monday, because many of the swings caused by triple-witching take place in the two weeks preceding it," said Kenneth Sheinberg, head of listed trading at

SG Cowen

. "If they can't get the market going soon, there could be a serious sell-off."

Multinational retailers may also be mixed. The proud owner of the swoosh,


(NKE) - Get Report

, reported stronger-than-expected profits last night, saying they were boosted by international growth. The company posted earnings per share of 77 cents, topping the 74 cent analyst estimate and the year-ago 70 cents.

But weakness in the euro has crippled profits at several other multinationals with operations overseas. Euro worries sabotaged several stocks yesterday, including


(MCD) - Get Report



(CL) - Get Report



(KO) - Get Report



(G) - Get Report


This was despite an intervention by the

European Central Bank

, which helped boost the euro slightly.

wrote about the move

yesterday .

Meanwhile, appliance-maker



was swinging lower 4.7% after it warned its earnings could be down 8% to 10% for the third and fourth quarters due to slower sales at

Circuit City

(CC) - Get Report

TheStreet Recommends



(HMY) - Get Report

stores. Circuit City stopped selling appliances in July, while Heilig-Meyers announced recently that it would close more than 300 of its 800 stores.

Elsewhere in the news,


(F) - Get Report

said it will buy back up to $5 billion of common and Class B stock in an effort to lift its stock price.


wrote about the buyback in a separate story

yesterday . Ford was fractionally higher on the news.

Back to top

Sector Watch

The energy sector was on a tear as oil prices stayed above $34 a barrel due to growing tensions in the Middle East and a storm threatening the southern Gulf of Mexico.


(XOM) - Get Report

shot to a new 52-week high of $89.38.


American Stock Exchange Oil & Gas Index

was up 4%, while the

Philadelphia Stock Exchange Oil Service Index

was up nearly 2%.

Back to top


The 10-year Treasury note was lately down 15/32 at 99 9/32 and yielding 5.84%.

The CPI fell 0.1% in August, its first drop in 14 years, but a 2.9% drop in energy prices was to blame. The core CPI, which excludes food and energy and is a more stable barometer of inflation trends, rose 0.2%, in line with the average forecast. The sharp rise in oil prices over the last month is expected to produce a considerably less friendly September CPI.

The annual growth rate of the CPI edged down to 3.4% in August from 3.5% in July.

The Treasury market is continuing the trend that started earlier this week, favoring short-term securities at the expense of long-term ones, based on the view that the Fed is finished raising interest rates and may contemplate cutting them if global growth hits a series of speed bumps.

Yesterday, an early rally in the bond market -- after a surprisingly friendly reading on inflation at the wholesale level -- morphed into a sell-off that moved the 30-year bond's yield decisively higher than the 10-year note's yield for the first time since January. The sell-off came amid shifting views on monetary policy and heavy issuance of corporate bonds.

wrote a separate article on the steepening

Treasury curve.

Back to top


In late trading, European markets were seeing technology and telecom struggle to hold on to Thursday's gains after new rises in oil prices re-ignited inflation worries.


FTSE 100

was tumbling 138.2 to 6417.3 after turning around a weeklong losing streak yesterday.

Across the channel, the

CAC 40

in Paris was down 23.26 to 6614.65, and the

Xetra Dax

in Frankfurt was off a more mild 7.59 to 7040.91.

The embattled euro was lately trading at $0.8593.

Asian markets were flat to lower today, as selected telecom and electronic stocks fell lower on profit-taking before the weekend.

Korea took a beating, however, with the key


index falling more than 3% after U.S. auto giant Ford said it was pulling the plug on its planned buyout of troubled

Daewoo Motor

. Korea's


index slid 21.94, or 3.4%, to close at 628.20.

Hong Kong's

Hang Seng

index shed 145.90 to finish at 16,249.53 and Taiwan's


index rose 3.16 to stand at 7155.45. Tokyo markets were closed for a public holiday.

The dollar was lately trading at 107.35 yen.

Back to top