The major market measures opened to the downside Wednesday, as had been indicated by the persistent early weakness in the futures market. However, profit-taking quickly subsided with the help of economic data that lent some credence to the notion that the economy is cooling.

By recent standards, the action was rather dull, and the gains were very short-lived. While the bond ghouls kept on partying (at least in Treasuries, as spreads widened significantly), the stock jocks couldn't keep the good times rolling. The day's range was basically in place within the first 90 minutes of trading, as not even heavy doses of analyst hype could keep the tech stocks in gear. The

Nasdaq Composite's

failure to break through the 3,500 level frustrated the bulls, but the lack of any widespread damage did little to satisfy the bears.

In the "old days" (think way back to the '90s), the action might have been called volatile; in the "New Era" it was about as close to dull as one is likely to see. Kind of like the

Knicks

last night after the first quarter, although the market's late weakness was nothing like New York's virtual disintegration. (Now that really hurt, and watching the debacle has left me in an even more stupefied state than usual in the predawn darkness.)

The market limped into the close with the

Dow

down 5 points, with

Hewlett-Packard

( HWP) the biggest drag after the company dismissed talk that it would dispose of its

VeriFone

unit. Strength in the financials helped to offset weakness in tech stocks and the

S&P 500

lost two points. The tech-heavy Composite gave back about 59 of Tuesday's 254-point surge.

The big losers were the megacap tech leaders, with

Qualcomm

(QCOM) - Get Report

reversing course again, as the

Nasdaq 100

fell 90.

Microsoft

(MSFT) - Get Report

filed its response to the

Justice Department's

recommendation after the close, and it's now only a matter of how quickly

Judge Jackson

will rule to break up the "evil empire."

With a full complement of traders on hand after the long weekend, volume picked up but was still rather anemic by recent standards. Breadth was positive on the

New York Stock Exchange

by about 4-3 but it was negative by 140 issues on the Nasdaq, accurately reflecting the overall tenor of the market.

Many of the stocks that lagged during Tuesday's ramp moved to the fore as the tech leaders gave back some of their outsized gains. July crude reversed sharply to the downside, plunging $1.40 per barrel to $28.95 on comments that

OPEC

could pump out an additional 500,000 barrels/day as soon as next week, if the 20-day average price exceeds the $28 upper end of its price band. However, energy stocks were sharply higher, with the

Philadelphia Stock Exchange Oil Service index

, or OSX, gaining 5.3%, after several analysts made positive comments on the group, and the

Amex Oil index

, or XOI, gained 2.4%. Continued concerns about natural gas supplies this summer kept the group hopping, as the

Amex Natural Gas index

, or XNG, rallied 3.2% to a high.

Retailers, led by

Wal-Mart

(WMT) - Get Report

, which kicks off a two-day analyst meeting today and was reiterated a "buy" at Lehman, were also mostly higher. Lowly

Kmart

( KM) even joined the party after announcing that

CVS'

(CVS) - Get Report

president will take the reigns. The

S&P Retail Index

, or RLX, rallied 4.1%, even with weakness in the major electronics peddlers. Many retailers will report May sales today, as will auto companies, which faltered on increased incentives announced by

DaimlerChrysler

( DCX).

Electric utilities were also firm after losing ground Tuesday, with the help of the rally in Treasuries. Perhaps the biggest disappointment was the inability of the

Philadelphia Stock Exchange Semiconductor Index

, or SOX, to hold its early advance. It seemed as if every analyst was out beating the drum for the group, but only a handful remained in the green at the close.

Motorola

( MOT) was particularly weak late in the day on talk that it was guiding estimates lower, after having gained ground on its announced collaboration with

Flextronics

(FLEX) - Get Report

. That deal helped to keep the contract manufacturers strong, as they're expected to benefit from the trend toward the increased use of outsourcing.

Aetna

(AET)

was hot on rumors that it was in talks to shed its financial-services businesses, and led the

Health Care Index

, or HCX, to a small gain. Aetna confirmed that it was in talks with

ING Groep

(ING) - Get Report

after the close.

While the 5.8% decline in new home sales and another decline in the prices-paid component of the

Chicago Purchasing Managers

report helped to boost prices in Treasuries, that the moves were as large as they were may indicate that traders are growing increasingly leery about credit quality. Technical factors played a role, for sure, but the strong moves were curious considering the release of the

National Association of Purchasing Managers

report today and, more importantly, tomorrow's employment data. The long bond went out at 6.00%, and the benchmark 10-year note also eased 8 basis points to yield 6.29%.

If the bulls had something to be concerned about in an otherwise dull affair, it was the inability to mark up big-cap techs at the end of the month on what was viewed as positive (weaker) economic data. Were funds aggressively hitting bids, or was it simply profit-taking and a bit of caution ahead of the more important economic reports? In any case, investors should remain defensive and wait to see how the employment report comes in tomorrow.

Aggressive traders who bought weakness in techland yesterday should stay the course. However, if the Nasdaq Composite fails to hold the 3300 area during the usually strong period at the beginning of the month, it's probably wise to cut and run. Confidence is a fragile commodity, and the action in the credit markets outside of Treasuries may be a sign that all's not quite well in the New Economy." One thing's for sure: Dull isn't likely to be descriptive of the action on the Street of Dreams going forward.

Bill Meehan is the Chief Market Analyst for

Cantor Fitzgerald, a Manhattan-based institutional trading and research firm. Prior to that, he was a market analyst for Prudential Securities. At time of publication, Meehan was long Wal-Mart, although holdings can change at any time. He appreciates your feedback at

commentarymail@thestreet.com.

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