RealTime IT News

Techs Drop, But Nets Hold Ground

Internet stocks managed to hold their ground despite a sharp sell-off in the Nasdaq on Tuesday. Downgrades to Intel and drug stocks led the broader market lower.

The ISDEX was down fractionally at 836, while the Nasdaq lost 91 to 4143. The S&P 500 dropped 13 to 1507, but the Dow added 21 to 11,260. Volume rose to 840 million shares on the NYSE and 1.66 billion on the Nasdaq. Decliners led slightly on the NYSE and 22 to 18 on the Nasdaq. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our new after hours trading site.

Internet leaders showed surprising strength. Priceline gained 3 to 28 15/16, Amazon rose 4 3/16 to 45 5/8, eBay climbed 4 3/4 to 67 1/2, and beleaguered Yahoo added 2 7/8 to 117 1/8.

Intermedia Communications , which owns 54% of Web hosting firm Digex , rose 8 19/32 to 31 15/32 after confirming that it will be acquired by WorldCom . Digex, which had run up in anticipation of a buyout, fell 16 5/8 to 67 7/8. Exodus, which had been rumored as a possible Digex suitor, was off 3 3/8 to 62 13/16. But other firms rose on the news. Data Return gained 2 13/32 to 21 29/32, NaviSite added 2 13/32 to 47 3/32, and Equant rose 5 9/16 to 45 7/16.

Earnings warnings continued to hit Internet consulting firms. iXL , off 1 9/16 to 6 13/16, fell on an earnings warning and news that company President William Nussey resigned. Xpedior fell 2 7/16 to 8 3/8 after announcing that third quarter revenues will decline 10% sequentially. But Scient regained 13/16 to 22 13/16, and Diamond Technology Partners recouped 5 3/8 to 61 1/8.

America Online slipped 5/16 to 57 1/16 on reports that federal regulators may require the company to open its cable systems in some markets before approving the merger with Time Warner. GoTo.com rose 3 13/16 to 23 5/16 on a multi-year $50 million agreement with AOL.

MicroStrategy gained 3 5/8 to 35 after naming WorldCom Vice Chairman John Sidgmore chairman of the company's Strategy.com unit.

B2B stocks gave back some of their early gains on positive comments from Salomon Smith Barney. i2 lost 4 1/16 to 175 3/16 after trading as high as 188, and Commerce One rose 3 1/4 to 69 1/4, pulling back after breaking through 70 resistance.

Some technical comments on the market: We said at midday that we did not want to see the Nasdaq 100 go below 4000. The index closed at 3987, its low for the day, and in the process broke a large rising wedge encompassing all of its gains since 3341 in early August. That's a lot of potential downside. The break came on rising volume, another negative. However, the Nasdaq 100 finished just above a support point at 3975, and the Nasdaq Composite is right at its lower rising wedge boundary, so we could get a bounce here. The S&P 500 also broke its rising wedge to the downside today. As the last break of a rising wedge didn't lead to much of a sell-off, we won't worry about this one unless the S&P begins to head lower. First support is 1505, followed by 1500 and 1490. To the upside, the lower broken wedge boundary is likely to rise to 1512-1513 tomorrow, and above that, the index has met with strong resistance around its all-time closing high of 1527. The ISDEX is trapped in a tight trading range between 850, its 50% retracement level, and 825, the lower boundary of a bearish rising wedge. Th