RealTime IT News

Nets, Techs Move Higher

Internet and technology shares continued to rally on earnings news Friday morning. But blue chips continued to tread water, held back by weakness in drug stocks.

The ISDEX rose 22 to 821, powering above 800. The Nasdaq added 40 to 4215. The S&P 500 added 5 to 1500, but the Dow fell 15 to 10,773. Volume declined slightly to 445 million shares on the NYSE, but fell 10% on the Nasdaq to 800 million shares. Advancing issues led 13 to 11 on the NYSE and 18 to 17 on the Nasdaq. June's Producer Price Index came in at a 0.6% increase, as expected, but the core declined a better-than-expected 0.1%. The retail sales report came in stronger than expected, however. For earnings reports, visit our earnings calendar and reported earnings.

The story of the day was earnings. Juniper Networks rose 4 1/2 to 174 and Stamps.com gained 5/8 to 6 1/2, both on better-than-expected numbers. But a number of stocks fell despite beating estimates, including RSA Security , off 7 1/2 to 71 1/4, Keynote , off 15 13/16 to 67 3/8, and Broadbase Software , down 6 5/16 to 32 11/16. HomeGrocer fell 1 1/8 to 6 7/8 despite better-than-expected numbers, dragged down by an earnings miss and warning from merger partner Webvan , which fell 1 27/32 to 7 15/32. Sonus Networks fell 9 5/16 to 182 1/2 after missing analysts estimates. Extended Systems cratered 36 1/8 to 51 on an earnings warning.

Business-to-consumer stocks led the ISDEX higher. Amazon.com gained 4 15/16 to 39 15/16 after a strong defense and Buy rating from Salomon Smith Barney. The firm expects Amazon to finish the March 2001 quarter with $666 million in cash.

eBay soared 7 9/16 to 61 on a CS First Boston Strong Buy rating and $72 price target. Priceline.com gained 1 7/16 to 39 7/8 on a CS First Boston Buy rating and $45 target.

Yahoo gained 4 15/16 to 127 1/2 after Yahoo Japan posted strong earnings numbers.

Commerce One continued to gain in the wake of Ariba's bullish earnings report, adding 5 1/16 to 65. The company reports earnings after the bell on Tuesday. The stock broke out of a three-month symmetrical triangle yesterday at 52, with potential upside to 85 or higher, based on the high (65) and low (29) points of the pattern. The stock has gapped up two days in a row.

Alteon WebSystems gained 10 11/16 to 135 on a Business Week report that the company could be a takeover target. But Vignette declined 2 1/8 to 50 1/8 despite a positive mention in the magazine.

Covad continued to rise, adding 1 1/8 to 23 1/8 on a Banc of America Buy rating. NorthPoint , up 11/16 to 14 5/8, and Rhytms , up 1 3/8 to 17 b3/4, received Market Perform ratings.

MarketWatch added 2 to 24 1/4 on a First Albany Strong Buy rating and $35 price target.

Some technical comments on the market: The ISDEX and the Nasdaq continue to look good here, but the S&P 500 continues to look like it's about to fall out of bed in the next day or two, so we'll begin there. We mentioned yesterday that the S&P 500 was forming a rising wedge in the 60-minute chart; that pattern continues to wind tighter. The rule of thumb is that a rising wedge usually breaks down about two-thirds of the way through the pattern. That means the S&P 500 should decline at about the end of today or the start of Monday, at about the 1507 level, just beneath our important 78% retracement l