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RealTime IT News

Corporate Credibility Remains Front And Center

Reports that Tyco's CEO was fired amid a tax avoidance investigation sent stocks plunging on Monday.

Investors ignored more positive economic reports as they continued to focus on corporate credibility and accounting concerns.

The ISDEX http://www.wsrn.com/apps/ISDEX/ lost 4 to 115, and the Nasdaq plunged 53 to 1562. The S&P 500 fell 26 to 1040, and the Dow dropped 215 to 9709. Volume rose to 1.31 billion shares on the NYSE, but declined to 1.62 billion on the Nasdaq. Decliners trounced advancers by 23 to 8 on the NYSE, and 25 to 8 on the Nasdaq.

After the close, Flextronics warned.

During the day, Microsoft fell 3% to close under $50 after reaching an agreement with the SEC on revenue and earnings reporting issues. The agreement will have no effect on previously reported results.

Lucent fell 21% after spinning off its Agere unit.

USA Interactive announced an unsolicited $4.5 billion bid in stock for the outstanding shares of three publicly traded subsidiaries - Expedia , Ticketmaster and Hotels.com . EXPE, TMCS and ROOM gained 2-3% on the news.

Oracle fell 7% on earnings concerns.

Internet monitoring firm Websense fell 9.5% after a court struck down the Children's Internet Protection Act.

Xilinx fell 12% after raising estimates, but not as high as investors wanted.

Transmeta gained 8% on a deal with Hewlett-Packard .

Comverse fell 11% on a Goldman Sachs downgrade.

Cognizant fell 16% on concerns about the effect of India-Pakistan tensions on business.

Some technical comments on the market: Note: To see the charts in the text email newsletter, click on the internetstockreport.com story link at the top of the newsletter.

The Dow (first two charts) and S&P 500 (third chart) broke the critical levels of 9800 and 1049 today. Next support is 9500-9600 on the Dow and 1030 on the S&P. Resistance is 9800-9900 on the Dow, and 1049-1055 on the S&P. If 1030 goes on the S&P, 995 is the next strong support. Using the recent breakdown out of a bear flag on the S&P, the downside target becomes 950-980 if the first leg down is duplicated, and that seems like a good possibility at this point. The Nasdaq (fourth chart) closed right at 1560 support. Next support is 1507-1528, and resistance is now 1600-1610.

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Special report: For a free introduction to technical chart patterns, visit http://www.internetstockreport.com/guest/article/0,1785,2571_500051,00.html.