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RealTime IT News

Bulls Shake Off Bad News

Stocks shook off a much worse than expected second quarter GDP report to close at their best levels of the day.

The ISDEX http://www.wsrn.com/apps/ISDEX/ lost 3 to 95, and the Nasdaq fell 15 to 1328. The S&P 500 gained 8 to 911, and the Dow rose 56 to 8736. Volume rose to 1.94 billion shares on the NYSE, but declined to 1.64 billion on the Nasdaq. Advancers led 16 to 15 on the NYSE, but decliners led 19 to 14 on the Nasdaq.

After the close, Adobe plunged on a warning, but priceline rose despite warning. Computer Sciences guided lower.

During the day, IBM slipped 2% on news that it will acquire PwC Consulting for $3.5 billion.

AOL fell 7% on news of an accounting probe.

KLA-Tencor , NVIDIA , Cree and S1 fell on their earnings reports.

Baby Bells SBC and BellSouth were boosted by better than expected results from Verizon .

MicroStrategy topped estimates and engineered a reverse stock split. It should revert from MSTRD to its MSTR symbol in a month, the company said.

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.

We have breakdowns in the Dow and S&P (first five charts below), but nice support around today's lows of 8537 and 889. 8200 and 840 are also good support levels. If those are bearish rising wedges, they predict a retest of the lows (7532 and 775), and possibly a duplication of the last leg down, which would target 6900 on the Dow and 700 on the S&P, assuming the top is in. Since we've never gotten a string of 90% down days to signal capitulation, those are not unreasonable targets, and are also pretty good support levels (6933 was the October 1997 low). To the upside, 8897 on the Dow and 950 on the S&P are very tough resistance. The Nasdaq (sixth chart) is struggling at the 1340-1387 resistance zone, as it should. Almost any move tomorrow would be a breakout or a breakdown in whatever direction the index moves; note the trendlines converging at tomorrow's open. 1300-1307 and 1286 are first supports if the move is down. The ISM report at 10 a.m. could be a market mover.

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