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RealTime IT News

Stocks Routed On More Weak Data

Signs of a slowdown in the services sector led to a broad-based stock market sell-off on Monday.

The ISDEX http://www.wsrn.com/apps/ISDEX/ lost 3 to 84, and the Nasdaq fell 41 to 1206, its lowest close in more than five years. The S&P 500 dropped 29 to 834, and the Dow plunged 269 to 8043. Volume declined to 1.4 billion shares on the NYSE, and 1.35 billion on the Nasdaq. Decliners led 24 to 7 on the NYSE, and 24 to 9 on the Nasdaq.

After the close, Mercury Computer warned.

During the day, Cisco fell 53 cents to 11.36 ahead of its earnings report after the close on Tuesday. The stock's September low was 11.04.

Intel and Qualcomm led the list of new 52-week lows.

Microsoft lost 1% as it began to implement the terms of the company's antitrust settlement with the Justice Department.

AMD gained 3% on a positive mention in Barron's.

Paychex fell 6% after being dropped from Goldman Sachs' recommended list.

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.

Caw Caw Caw. The Dow, the S&P and the Nasdaq completed the bearish "three black crows" candlestick pattern today (see first three charts below), a highly reliable bearish pattern. A bounce to the middle of the pattern could occur - 8387 on the Dow, 872 on the S&P, and 1264 on the Nasdaq - but the minimum downside should now be 8700 on the Dow, 796 on the S&P, and 1148 on the Nasdaq. The July 24 lows were 7532 on the Dow, 775 on the S&P and 1192 on the Nasdaq, so the Nasdaq appears assured of new lows. 8200-8300 is resistance on the Dow, and 844-853 is resistance on the S&P. 1220 is first resistance on the Nasdaq, and then 1262. The VIX (fourth chart) put in the opposite of the three black crows - three white soldiers - and should be headed for a retest of the 57 level. Even gold stocks (fifth chart) looked weak today, a real surprise there. The one plus is the low volume of this decline - some great bottoms have occurred on low volume, but what level that bottom will occur at remains to be seen. And let's hope the volume stays low.

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