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RealTime IT News

Stocks Rally Despite Terrorism Warning

Stocks rallied on the eve of the anniversary of the September 11 terrorist attacks despite a warning about possible terrorist attacks on U.S. targets overseas.

The Nasdaq climbed 15 to 1320, the S&P 500 rose 6 to 909, and the Dow gained 83 to 8602. Volume rose to 1.16 billion shares on the NYSE, and 1.44 billion on the Nasdaq. Advancers led 18 to 13 on the NYSE, and 17 to 15 on the Nasdaq.

After the close, Comverse Technology rose on better than expected results, and Xilinx reaffirmed guidance.

During the day, Nokia slipped 2% on a disappointing outlook.

NVIDIA surged 14% on reports that the company raised wafer orders for the fourth quarter. Taiwan Semi gained 7% on the news.

J2 Global Communications gained 8% after reaffirming guidance.

TTM gained 11% on an upgrade.

Ameritrade rose 9% on a stock buyback and the approval of its merger with Datek.

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 big question for tomorrow will be whether there are any terrorist attacks and what the market's reaction will be. Since the market rallied strongly after there were no attacks on July 4, the expectation appears to be for a repeat, which could indicate a muted rally if there is no bad news, since the market's expectations are usually confounded. Also, the market has fallen this entire year to new lows just on economic and corporate news, so terrorism does not appear to be the primary driver of this market. Hopefully, there will be no attacks tomorrow, and the most important news will be the release of the Fed Beige Book at noontime. The markets open at 11 a.m. tomorrow after memorial observances.

One sign that economics matters is the bank index (see first chart below), which fell 1% today on warnings and news of record foreclosures, and appears to be forming both a bear flag and a head and shoulders top. It's hard for the market to go far without the participation of the financials. The S&P and Nasdaq intraday charts (second and third charts) seem to combine elements of bearish broadening tops and rising wedges, suggesting more downside ahead for this correction. In the daily chart, the S&P (fourth chart) has strong resistance in the 910-917 range, and even stronger resistance at 925-930. Support is 900 and 875. The Nasdaq (fifth chart) has support at 1290-1300 and 1250-1263, and resistance is 1340-1350. On the Dow (sixth chart), the critical levels are 8785 and 8200.

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