As I left for home Thursday night, after the Nasdaq's days of agony and Lucent's dire warning, a voice whispered in my ear, saying, "Fred, this is 'it.' "

Bubble stocks falling from grace, that's one thing. They're mere Internet plays. Live by momentum. Die by momentum.

It's wholly another for a rock-solid company such as Lucent Technologies Inc. to issue a whopper of an earnings warning and then lose 23 percent of its value in three hours.

Lucent is no "play." Lucent is an investment.

Surely all this would reverberate, I thought, and start the panic.

"Get ready," the voice said as I went to sleep.

When I arrived in the office Friday morning, however, the voice was calm. "Fred," it said. "Get a life."

By the end of the day Friday, the Nasdaq composite index was up 155.49 points, down 4.6 percent for the week. The Dow was up 269.30 points, roughly even for the week.

Another disaster narrowly averted.

I found it all reassuring, for a number of reasons.

First, the market plunged and investors bought "on the dip." That's proof that the force lives.

Also, contrary to the notion that the market is disconnected from reality--that is, from economic performance--reality kept it afloat last week. In the face of bad news at one company, technology stocks didn't collapse, because the demand for technology by business remains insatiable.

A Merrill Lynch report out Friday estimated that demand for business hardware and software will grow about 17 percent in 2000, compared with 13 percent in 1999. Earnings are expected to grow apace.

Of course, by traditional valuation standards, no conceivable amount of earnings growth this year can keep up with the fantastic prices these stocks fetch now. Overvaluation--stocks priced at 50, 100 or even 200 times earnings--continues to unnerve many market pros. This and rising interest rates dictated by the bond markets and the Federal Reserve still stalk Wall Street.

The message of the Lucent profit warning Thursday, however, was not that technology demand is in trouble. It was quite the opposite. The company--in which I hold stock--said that it couldn't make its products fast enough to keep up with demand. Customers thus went elsewhere.

That's bad news for Lucent, but not for the markets.

It was reassuring, though, that people--especially analysts who get quoted in the media--read deeply into Lucent's announcement, in which the company said it expects its strongest growth to come in the year's second half. They saw that the current problems at Lucent were mostly "company-specific," rather than a negative for an industry. That helped contain the potential collateral damage.

"The end of the world may have to be delayed," wrote Don Luskin, who helps run the country's most open trading desk, on display minute by minute at MetaMarkets.com.

Lucent made its announcement in full public view, on its Web site, demonstrating the merits of public warnings vs. quiet whispers to analysts. We get the full story, with context, rather than sudden sell-offs, with no context and subject to any interpretation and any reaction.

Sure, we almost had what some insisted on calling a "correction" during the week. The Nasdaq composite fell back almost 10 percent from its 52-week high.

But if this be a correction, so be it. I can handle it--a 10 percent drop after an 84 percent rise. That's like a bad week for the Yankees.

What we saw, many analysts believe, was largely profit-taking. The sellers are people who made gobs of money in '99, scooping up profits they would have liked to have taken in December but didn't to avoid further tax liability for the year. If they're like some people I know, they might have also been raising cash to pay those '99 taxes, having binged away their grosses already.

The binge, many analysts believe, presents more of a threat to the markets than bubble stocks or Lucent, because heavy spending by the American consumer is what's most likely to keep interest rates rising. "The wealth effect needs to be reversed, or at the very least restrained," Salomon Smith Barney's Mitchell J. Held wrote in an analysis released Friday, "in order to slow the pace of economic growth to the Fed's liking."

What we also saw last week was serious volatility, which will no doubt continue through the year but is no cause for panic. You should worry about volatility if you think you're going to need the cash you've currently invested. If you don't need it, it's just a matter of not checking the ticker so often, a habit I admit I've not shaken.

"When you climb mountains at the rate we've been doing, then you have to be prepared for this type of volatility," said Ulric Weil, senior technology analyst at Friedman, Billings, Ramsey in Arlington. "And we're going to have it again. That's a way of life in this market. . . . If you can't take volatility, for god's sake get out of there. . . . You needed a heart-lung machine to live through these three days."

A therapy for volatility-phobia is to review stocks according to their "moving averages," on a curve that averages price fluctuations over periods longer than every five minutes or even every day. A curve of eBay averaged every day since August, for example, looks like the Alps, with many jagged peaks. A view of the 30-day average suggests lovely rolling hills. Nothing has changed except your perspective.

Another therapy is to move onto smoother, non-tech terrain, which is what many investors did in reaction to the volatility last week, providing a badly needed broadening of the strength of the market.

The icing on the cake: a good week, finally, for utilities and heavy machinery.

Let's hear it for backhoes.

A correction to last week's column: The ticker symbol for Elcom International is ELCO.

Fred Barbash (barbashf@ washpost.com) is The Post's business editor. He is a long-term owner of Lucent.