RealTime IT News

Blue Chips Pull Market Higher

The Dow moved above 11,000 on Friday for the first time in more than three months, in the process pulling the Nasdaq out of a tailspin.

The ISDEX gained 3 to 726, 17 points above its low for the day, and the Nasdaq gained 15 to 3774 after trading as low as 3686. The S&P 500 gained 10 to 1470, while the Dow soared 118 to 11,027. Volume declined to 395 million shares on the NYSE and 638 million on the Nasdaq. Advancers led 16 to 9 on the NYSE, but decliners led 18 to 15 on the Nasdaq. The Producer Price Index came in unchanged, in line with expectations, but retail sales were stronger than expected. For earnings reports, visit our earnings calendar and reported earnings.

After the bell on Thursday, Internet Capital Group reported a second quarter loss of 70 cents a share. No estimates were available. The stock lost 1 3/8 to 30 1/4. Dell Computer missed its whisper number and reported lighter-then-expected revenues, leading the Nasdaq lower by 3 1/2 to 38 1/4.

Blue Martini fell 3 41/64 to 62 1/2 after reporting a second-quarter loss of 23 cents a share. No estimates were available. Telescan lost 25/32 to 5 1/4 after missing estimates by 17 cents with a 15-cent loss.

Verio gained 1 11/16 to 58 7/8 on news that the FBI has resolved security concerns over the company's merger with Japan's NTT.

Datalink.net , one of the best-performing Net stocks this year, rose 1 13/16 to 17 9/16 on news that it will move to the Nasdaq on Monday and begin trading under the symbol XLNK.

Xcelera.com gained 5/8 to 12 1/2 on news of a special dividend.

Clarent gained 6 5/8 to 45 7/8 on rumors of an investment from Microsoft and news that its merger with ACT Networks will go through. Net2Phone gained 4 27/32 to 30 27/32 on takeover rumors.

Sonus Networks rebounded 15 1/2 to 214 on positive comments from Prudential and a $240 price target.

eGain Communications gained 27/32 to 8 11/16 after beating estimates by 3 cents with a 61-cent loss.

The IPO of Equinix priced at 12, opened at 12 3/4 and traded around unchanged.

Some technical comments on the market: We said yesterday that we were hopeful this pullback could be mild, and that seems to have borne out this morning. The Nasdaq found support this morning around its first major support at 3700. The Nasdaq appears to be stuck in a large trading range between 3500 and 4289, and has yet to establish firm direction either way. The Fibonacci levels speak volumes here: the rally from 3042 to 4289 stopped just short of the 62% retracement level (4337) of the index's big April to May decline; we then retraced 62% of that move to 3521, retraced up 50% to 3936, and back down 62% to 3686. Not once have we cleared the 62% number necessary for a move to become a trend in its own right. The big positive today is that the Dow is back above 11,000. However, the move comes on very low volume, and the index is right at the upper boundary of its bearish diamond pattern: a scenario more likely to fail than to succeed. We'll wait for the weekly charts to update over the weekend to judge whether we have a low-volume breakout here. The Dow has strong support at 10,900. We still have some negative patterns in the background here: the S&P, Nasdaq and the ISDEX completed only about half of their predicted down moves out of bearish rising wedges recently. However, as we've said, the markets do not look like they are set up for large further declines here; we may have another week or more of a relatively flat market. The ISDEX twice failed to penetrate the l