RealTime IT News

Yahoo Tops Estimates

Yahoo capped a steep sell-off on Wednesday by announcing better than expected results after the bell.

The ISDEX http://www.wsrn.com/apps/ISDEX/ lost 1 to 99, and the Nasdaq fell 35 to 1346. The S&P 500 dropped 32 to 920, below its October 1998 low of 923, and the Dow plunged 282 to 8813. Volume rose to 1.79 billion shares on the NYSE, and 1.83 billion on the Nasdaq. Decliners led 24 to 8 on the NYSE, and 23 to 11 on the Nasdaq.

After the close, Yahoo rose 3-4% after beating estimates and reaffirming guidance. VeriSign surged more than 10% despite warning. Redback and McAfee.com topped estimates.

During the day, eBay rose 3% on news that it will join the S&P 500 effective July 19.

Cisco , Brocade and Extreme gained on upgrades.

AOL fell 6% on unconfirmed rumors that the company will be broken up.

Qwest plunged 32% on news of a criminal investigation, and Microchip fell 8% on a downgrade.

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.

With important support broken on the S&P 500 (see first two charts below), the next critical support for the market is likely 1315-1326 for the Nasdaq (third chart), which bottomed at 1336 last week. If that level can't hold, 800 on the S&P and 1200 on the Nasdaq (fourth chart) seem like stronger long-term supports. To the upside, 935 and 950 on the S&P are now some pretty important resistance levels, and 1400 looks like a toughie on the Nasdaq. One plus is that the S&P could be sitting right on a lower falling channel line in the daily chart, so an immediate rally is not out of the question. The Dow (fifth chart) has support in the 8600-8750 range. Resistance is now 8900 and 9000. The VIX, the options volatility index (sixth chart), had a nice spike today, showing a healthy amount of fear, but it's also a long way from where it was on September 21 (57). A spike to about 45 would look like a good test of September's closing highs. And finally, a word about capitulation: We keep searching for the elusive string of 90% downside days that have marked important historical bottoms. We have yet to see one in this downtrend, and today's NYSE downside volume (86%) didn't even reach July 2's 88% reading. The market could bounce soon, but it looks like it still has more work to do on the downside.

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