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Tech stocks tried to rally. They really did.

But light trading action on this Yom Kippur and

Columbus Day holiday fueled volatility on the

Nasdaq Composite Index as well as the

Dow Jones Industrial Average. In the last hour, the Comp hit the upside, but it couldn't hold on. The index kept on its slide downward and neared lows not seen since May.

John Manahan, head trader at

Brown Brothers Harriman

, said the Nasdaq hit a support level of 3250 and bounced off -- which he considered to be a good sign going forward.

"Our guys here are thinking that it's getting strong on the buy side," Manahan said. "We're starting to feel that bad earnings are out of the way."

Still, Manahan said, "The big thing is we have to start seeing some better earnings."











International Paper


are a few of the stocks that are set to kick off

earnings season.

But let's not get ahead of ourselves. We had more earnings warnings today.









were a few of the bad new bearers.

Williams-Sonoma fell almost 30%, to $19, on the news.

wrote about the

company's warning in a separate story. Safeco tumbled 4.9% after its warning.

Electroglas, which makes equipment for the development of semiconductor devices, said Friday it expected third-quarter earnings to miss consensus estimates due to material shortages. Electroglas, which was down 3.5%, by itself wouldn't make much of a splash. But high-profile earnings warnings from such companies as






has investors on edge.

Consensus estimates show analysts have revised their third-quarter earnings growth projections down to 14.9% from 15.3% last week, according to a morning report from market research firm


. Analysts were initially expecting 18.2% growth at the close of the second quarter. Meanwhile, new preannouncement data showed this has been the worst confession season of the year, with 70% of total preannouncements negative.

Still, I/B/E/S remained largely optimistic, saying that the history of positive surprises seen within the

S&P 500, it believes the 14.9% growth figure is conservative. Third-quarter earnings growth, the report said, can still approach 18%-19% if past trends continue. (

looked at the earnings-growth outlook in a

Wednesday story.)

The Nasdaq got pushed down by bellwethers like the aforementioned Intel, off 2.1% to $39.06;



, off 4.5% to $53.69; and



, off 1.3% to $66.75.




was got smacked down nearly 80%, or $20.19, to $5.31 after it dropped plans to seek approval of its drug Relaxin failed its Phase III trial. Relaxin is used to treat the skin disease scleroderma. The news prompted a downgrade by

Lehman Brothers

, which cut its rating on the company to neutral from outperform, and

UBS Warburg

, which cut it to hold from buy.

On the Dow,

United Technologies


won the title of biggest drag on the Dow. It took away about 11 points.



, though, was countering that weakness. Rebounding from last week's slide, it added some 22 points of upside to the index.



hopped on H-P's coattails, contributing almost 12 points to the index.

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Market Internals

Breadth was terrible today on light holiday volume.

New York Stock Exchange: 1,208 advancers, 1,562 decliners, 718 million shares. 20 new 52-week highs, 80 new lows.

Nasdaq Stock Market: 1,498 advancers, 2,373 decliners, 1.4 billion shares. 19 new highs, 344 new lows.

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Most Active Stocks

NYSE Most Actives

  • Motorola: 15.7 million shares.
  • Nokia (NOK) : 11.6 million shares.
  • Nortel (NT) : 11.5 million shares.

Nasdaq Most Actives

  • Intel: 55.6 million shares.
  • Cisco: 45.0 million shares.
  • Dell (DELL) : 37.0 million shares.

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Sector Watch

Internet stocks bounced back after getting flattened last week. Internet Sector Index

was up 3.1%.



gave the sector a rowdy kick. BroadVision jumped 20.2% to $21.94 after a month-long slide in September.









were some other components helping lift the sector.

Renewed strength in oil prices was no good for market sentiment. But it sure was good for oil and gas stocks. The

American Stock Exchange Oil & Gas Index

was up 2.2%, while the

American Stock Exchange Natural Gas Index

was 2% higher. Crude oil prices rose as much as 88 cents to $31.10 as violence escalated in the Middle East and an early spell of cold weather hit the U.S. Oil reserves are already at a 24-year low and a number of refineries this month are reducing their capacity for maintenance.

Brokerage stocks continued to wallow in their misery after getting badly hit Friday by concerns of margin calls and chatter over rumored losses on junk-bond trading. Investors are worried that trading-related losses will hurt the revenues of the big brokerages.

wrote about one brokerage's

denial of the rumors as well as a

preview of financials' earnings. The

American Stock Exchange Broker/Dealer Index

was 2.2% lower.

Investors sought shelter from poor earnings in gold. The

Philadelphia Stock Exchange Gold and Silver Index

rose 2.5%.

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The bond market is closed for Columbus Day. The benchmark 10-year Treasury note last traded on Friday at 99 15/32, yielding 5.821%.

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The U.S. market dragged European markets lower and the major indices ended in the red.

In London, the

FTSE 100

was down 126.40 to 6264.80.

Across the channel, the

CAC 40

in Paris was down 148.35 to 6110.06, while the

Xetra Dax

in Frankfurt was 112.09 lower to 6664.30.

The euro was squeezing out some slim gains, lately up to 0.8681.

recently looked at what

ails the euro.

Japan's stock markets were closed for a holiday Monday, but the rest of the

region's equity markets were led lower by weak technology and telecom shares. The yen was recently quoted at 108.72.

Hong Kong's

Hang Seng

closed down 491.18, or 3%, at 15,693.50, as index heavyweight

China Mobile


tanked HK$3.25, or 5.5%, to 55.75 ($7.15). Volumes remained low, however, as Hong Kong was returning from a long weekend after being shut for its own local holiday on Friday.

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