RealTime IT News

Chip Stocks Sag

Chip stocks fell to new lows on Monday, dragging down the tech sector.

The Nasdaq fell 15 to 1275, the S&P 500 gained 1 to 891, and the Dow rose 67 to 8380. Volume fell to 986 million shares on the NYSE, and 1.1 billion on the Nasdaq. Decliners led 17 to 14 on the NYSE, and 21 to 11 on the Nasdaq.

After the close, Microchip raised guidance, but JDA warned.

During the day, Micron joined the new 52-week low list as the chip sector fell 4% on downgrades.

Lucent hit another new low.

Oracle slumped 4.6% ahead of the company's earnings report Tuesday after the close.

Red Hat surged 11% on an alliance with IBM .

Overture gained 7% on an upgrade.

eResearch and NetSmart once again hit new highs.

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 banks (first chart below) continue to hang on to critical support, the most important support for the market here. A clean break of that head and shoulders neckline around 730 would target 670. The market otherwise seems range bound here: the Dow (second chart) between 8575 and 8200 (8250 and 8400 are the first levels to watch); the Nasdaq (third chart) between 1305 and 1251-1263; and the S&P (fourth chart) between 910 and 870-875 (watch the 50-day moving average at 900). That all three indexes are consolidating at the lows suggests that the next move is down. The SOX, the semiconductor index (fifth chart), hit another new low today. 243 and 217 look like the next support levels. Finally, the most interesting thing going on in the financial markets at the moment is in the U.S. treasury bond market, where the 10-year yield (sixth chart below) has made new low after new in the last month. Since treasury yields in the last five years have tended to bottom at the same time, if not sooner, than stocks, that doesn't look like the greatest sign for stocks. 30-year yields (seventh chart) are closing in on resistance; if the September 2001 and October 1998 lows go, bond yields could be headed much lower.

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