RealTime IT News

Yahoo Beats Estimates, But Lucent Warns Again

Yahoo beat earnings and revenue estimates after the bell on Tuesday, but an earnings warning from Lucent pressured telecom equipment stocks.

Stocks dropped sharply during the day on earnings worries, led lower by semiconductor stocks. The ISDEX lost 26 to 665, and the Nasdaq dropped 115 to 3240. The S&P 500 lost 16 to 1385, and the Dow declined 44 to 10,524. Volume rose from Monday's light holiday trading, to 1.04 billion shares on the NYSE and 1.86 billion on the Nasdaq. Decliners led by 16 to 11 on the NYSE and 26 to 13 on the Nasdaq. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our after hours trading site.

Yahoo fell 3 1/16 to 82 11/16 ahead of its earnings report, and rose to 84 after the close. The company beat estimates by a penny with 13-cent-a-share earnings, in line with the whisper number. Revenues of $295.5 million beat estimates of $280-$285 million.

During the day, Ticketmaster Online slipped 3/4 to 13 after announcing an expanded partnership with Yahoo. Net2Phone rose 3 7/16 to 24 on news that the company and Yahoo will partner to offer voice-based services. And Speechworks gained 4 1/4 to 61 after announcing that its technology will convert Yahoo! Mail text messages to speech for the new Yahoo! by Phone service.

Cisco fell 3 3/15 to 50 1/2, just above critical 50 support, its May low.

National Discount Brokers soared 22 7/16 to 47 11/16 on a $49-a-share takeover offer from Deutsche Bank. NDB also said it had received merger inquiries from other companies.

Incubator Safeguard Scientifics rose 9/16 to 17 3/4 after partner company Nextron filed for an IPO.

Open Market dropped 3/4 to 3 3/16 on an earnings warning.

B2B stocks, yesterday's big winners, were weak. One exception was BroadVision , which climbed 1 7/16 to 23 3/8, continuing yesterday's gains on a partnership with i2 , which lost 4 to 169.

Akamai , a big winner yesterday, lost 2 1/8 to 41 3/4 after Merrill Lynch lowered its long-term rating to Accumulate from Buy.

Inktomi fell 6 3/4 to 89 3/4. As we said last week, the stock may be forming a descending triangle, similar to one that Priceline broke down out of at 32. A close below 87 would be a big negative for Inktomi.

Some technical comments on the market: Note: We are now including charts with the technical market commentary; just click on the links in the story below to go to them. If you have trouble accessing the charts via the e-mail newsletter version, try this link: http://www.afterhourstrading.com/column.html

We're getting tired of saying this, but the market is technically very oversold and due to rally. Hopefully, Yahoo's earning will give this market a reason to bounce; Lucent has had enough of its own problems that it shouldn't take down the whole telecom equipment sector. That said, stranger things have happened in this market. The Nasdaq continues to find support from a large congestion area from September-October 1999. If that breaks, here's hoping the May 3042 low holds. If not, the final bottom will likely be in the 2500-2900 area. To the upside, we want to see the Nasdaq get back above 3350, a small downtrend within a do