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Stocks Slump On Economic News, War Prospects

Stocks slumped Thursday on negative economic and earnings news, cautionary comments from Fed Chairman Alan Greenspan, and tough talk about Iraq from President Bush.

The Nasdaq dropped 35 to 1279, the S&P 500 lost 22 to 886, and the Dow fell 201 to 8379. Volume rose from Tuesday's levels to 1.19 billion shares on the NYSE, but declined to 1.19 billion on the Nasdaq. Decliners led 23 to 8 on the NYSE, and 21 to 10 on the Nasdaq.

After the close, Adobe surged on better than expected results. Verity matched estimates, and ESS Tech warned.

During the day, IBM fell 3% on rumors that the company may warn.

CDW dropped 4.6% on competition from HP , which itself lost 5.3% on negative comments from Goldman Sachs.

Sun Microsystems dropped 4.5% on Salomon Smith Barney comments that suggested a fair value for the stock is $2.

Semi equipment stocks fell on negative comments from Lehman Brothers, led by a 7% drop in Applied Materials .

AOL lost 6% on negative comments from Goldman Sachs.

Qualcomm fell 3.6% on rumors of a faulty chipset.

Netsmart surged 19% to a new 52-week high.

Hutchinson gained 9% after boosting guidance.

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, Nasdaq and S&P (first three charts below) completed yesterday's trifecta by forming bearish evening star reversal patterns. If the market has put in a lower high, minimum downside should now be 7867 on the Dow, 830 on the S&P, and 1172 (a new low) on the Nasdaq. Resistance on the Dow is 8450, 8500 and 8575, and support is 8300 and 8200. Resistance on the Nasdaq is 1290-1300 and 1305, and support is 1250-1263. The S&P faces resistance at 900 and 910, and support is 870-875. The banks (fourth chart) barely held critical support today.

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