VMware's Warning Can't Stifle Stocks
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A 24% plunge in shares of VMware (NYSE: VMW) did little to stymie stock market bulls on Tuesday, as comments by top market officials soothed investors worried about a prolonged downturn.
Fed Chairman Ben Bernanke said the Fed may continue emergency lending to investment banks into next year, and speeches by Treasury Secretary Hank Paulson and JP Morgan CEO Jamie Dimon also raised hopes that the credit crisis can be contained.
The result was an overdue bounce of more than 1% for the major indexes, and falling oil prices also helped brighten investors' moods.
But VMware was left out of the rally, as was parent company EMC (NYSE: EMC), which fell 12% after VMware guided revenues modestly lower and replaced its CEO. It was an inauspicious beginning for earnings reporting season, which begins in earnest next week.
Qualcomm (NASDAQ: QCOM), Level 3 (NASDAQ: LVLT), Research in Motion (NASDAQ: RIMM) and eBay (NASDAQ: EBAY) posted gains of 5% or more, and Apple (NASDAQ: AAPL) continued to rise ahead of the release of the 3G iPhone, tacking on 2.5%.
InterDigital (NASDAQ: IDCC) fell 22% after suffering a setback in a patent claim against Samsung.
Corning (NYSE: GLW) lost 4% after S&P lowered estimates on the company.
Syntax-Brillian (NASDAQ: BRLC) plunged 95% to 2 cents a share after filing for bankruptcy.
The Nasdaq rose 51 to 2294, the S&P gained 21 to 1273, and the Dow rose 152 to 11,384. Volume rose to 6.03 billion shares on the NYSE, and 2.53 billion on the Nasdaq. Advancers led by a 22-11 margin on the NYSE, and 20-8 on the Nasdaq. Upside volume was 75% on the NYSE, and 74% on the Nasdaq. New highs-new lows were 14-459 on the NYSE, and 38-347 on the Nasdaq.