Yahoo Warns; Koogle Out

Yahoo issued an earnings warning after the close on Wednesday, and announced that CEO and Chairman Tim Koogle will step down as CEO.

During the day, stocks rallied despite earnings warnings from Broadcom and JDS Uniphase. Cyclical issues soared on a Fed Beige Book reading that showed a slowing economy and few inflationary pressures, raising hopes for a 50 basis point rate cut when the Fed meets on March 20.

The ISDEX http://www.wsrn.com/apps/ISDEX/ finished unchanged at 282, and the Nasdaq rose 19 to 2223. The S&P 500 climbed 8 to 1261, and the Dow soared 138 to 10,729. Volume rose to 1.12 billion shares on the NYSE, and 1.74 billion on the Nasdaq. Advancers led 19 to 11 on the NYSE, and 19 to 16 on the Nasdaq. For earnings reports, visit our earnings calendar at http://www.wsrn.com/apps/earnings/internet.xpl and reported earnings at http://www.wsrn.com/apps/earnings/ireported.xpl. For after hours quotes and news, visit our after hours trading site at http://www.afterhourstrading.com.

Yahoo fell 3 1/2 to 18 1/2 after warning that the company will post breakeven results this quarter, 5 cents below estimates. Revenue of $170-$180 million will miss estimates of $230 million. The company will conduct an outside search to find a new CEO, but Koogle will remain as chairman. Yahoo also announced a $500 million stock buyback program. The stock was halted all day after canceling an appearance for tomorrow at the Merrill Lynch Internet Conference.

But earnings warnings don't seem to be having much effect on the broader market lately. JDS Uniphase, Broadcom and InterNAP were the latest to warn. Broadcom fell 7 5/8 to 40 1/4 after warning that earnings will come in at 8-9 cents, well under the 27 cents expected by analysts, and announced that a major customer had cancelled a contract. JDS slipped 1 to 27 after guiding estimates down from 17 cents a share to 14 cents. InterNAP plunged 2 13/32 to 1 15/16 after warning that quarterly and full-year revenues will come in light.

PurchasePro surged 1 1/2 to 11 3/4 on a positive earnings pre-announcement. Ariba rose 7/16 to 15 3/8 on analyst comments that the stock is undervalued.

Extended Systems rose 7/16 to 23 9/16 on news that it will be acquired by Palm , which rose 2 11/16 to 22 1/16.

The IPO of Loudcloud , the latest venture of Netscape co-founder Marc Andreessen, was pushed back to Friday.

Audiocodes fell 4 9/16 to 14 3/8 on UBS Warburg comments that the company could have a tough time making its numbers. Ulticom , up 3 9/16 to 28 15/16, continued to rally on good earnings news.

Investors in Check Point must have liked what they heard at yesterday's analyst conference, because the stock added another 4 1/4 to 70.

eToys filed for Chapter 11 bankruptcy and will be delisted from the Nasdaq tomorrow.

Some technical comments on the market: Note: We are now including charts in the technical market commentary. If you can't get the charts via the e-mail newsletter version, try this link: http://www.afterhourstrading.com/column.html

The Nasdaq is trapped in a 50-point range here, between 2200 and 2250. To the upside is a downtrend line from September and the January lows, both around 2250 (first chart). To the downside is 2200 support (second chart), below which the Nasdaq would begin to fill two gaps at 2142 and 2117. Which way will the trading range resolve? Our best guess is to the do