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Techs, Nets Rebound From Sharp Drop

Stocks fell sharply at the open Thursday after Motorola lowered handset sales guidance, but then rebounded on rumors that Cisco was reassuring investors that its earnings report next week will not disappoint.

The ISDEX gained 8 to 693 after falling as low as 656. The Nasdaq declined 21 to 3636, but more than 100 points off its low. The S&P 500 slipped a point to 1437, and the Dow declined 12 to 10,675. Volume rose to 470 million shares on the NYSE and 825 million on the Nasdaq. Breadth was weak on both exchanges, with decliners leading 15 to 10 on the NYSE and 24 to 10 on the Nasdaq. Traders awaited Friday's July employment data, which is expected to show a 70,000 gain in non-farm payrolls, a 4% unemployment rate, and a 0.3% gain in hourly wages. For earnings reports, visit our earnings calendar and reported earnings.

Cisco Systems fell below the important $60 level, trading as low as 58 before recovering, up 1 5/16 to 62 1/4. Investors have been nervous about the company's Aug. 8 earnings report since someone bought 56,000 puts on the stock earlier this week, a bet that the stock will fall, but Cisco reportedly reassured investors that the earnings report will not disappoint.

Internet leaders got whipped around in the volatile trading. Yahoo gained 2 3/8 to 129 1/2 after trading as low as 123. Ariba gained 4 1/8 to 118 15/16, 11 points off its low. But eBay continued to struggle after falling below the important $50 level, off 3/16 to 48 11/16.

After the bell on Wednesday, Go.com beat estimates by 11 cents with a 34-cent loss. Goldman Sachs raised the company from Outperform to Recommended List, and the stock gained 1 3/16 to 11 13/16. The company will become the Disney Internet Group on Monday, stock symbol DIG.

ZDNet beat estimates by a penny with 7-cent earnings, and CS First Boston upgraded the company from Hold to Buy, but the stock slipped 1/2 to 16 1/4. The company is being purchased by CNET , which lost 11/16 to 27 7/8.

Talk.com gained 3/16 to 4 7/8 after beating estimates by a nickel with a 1-cent loss. But Peapod missed estimates by 19 cents with a 58-cent loss, and the stock declined 7/32 to 2 5/32.

Vignette continued to rebound, up 2 3/4 to 37 7/8, more than 10 points above Wednesday's low, on news of an alliance with IBM .

Ventro bolted 2 9/16 to 13 1/8 on news of an alliance with American Express to create an online marketplace for corporations to purchase business products and services. The two will form a new company called MarketMile.

DSL equipment maker Westell fell 3 5/16 to 15 3/32 on a Jefferies & Co. downgrade from Buy to Hold.

Two recent IPOs continued to gain. Avici gained 14 9/16 to 146 9/16, but down from an intraday high of 158. SpeechWorks bolted 6 17/32 to 75 1/2, but off its intraday high of 80 9/16.

Two IPOs got a lukewarm reception on their first day, however. iAsiaWorks priced at 13 but fell to 10 1/2. ScreamingMedia.com fell to 10 1/2 after pricing at 12.

Some technical comments on the market: The Nasdaq and the ISDEX closed below recent lows yesterday, a warning sign that was fulfilled in big opening drops on both indexes this morning. However, the Nasdaq turned around after trading as low as 3521, in the process filling a gap from early June at 3585. A short-term bottom? Potentially, but the employment report tomorrow and Cisco's earnings on Tuesday are two big hurdles. If both go the bulls' way, we could get a rally here. However, next T



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