RealTime IT News

Stocks Drop In Rising Volume

Stocks fell on higher volume Tuesday morning, led by retail stocks. But Internet shares managed to eke out a modest gain.

The ISDEX gained 3 to 750, but the Nasdaq lost 13 to 3836. The S&P 500 fell 6 to 1485, while the Dow dropped 102 to 11,073. Volume rose about 20%, to 405 million on the NYSE and 600 million on the Nasdaq. Decliners led 15 to 10 on the NYSE and 19 to 16 on the Nasdaq. The big economic report for the week is tomorrow's Consumer Price Index, which is expected to show a 0.1% gain. Lycos reports earnings tonight. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our new after hours trading site.

eBay rose 1 3/8 to 49 9/16 after CEO Meg Whitman gave the keynote address last night at Pacific Crest's E.Conference.

Red Hat gained 1 3/4 to 23 9/16 on news of alliances with IBM and Motorola.

HearMe soared 3 1/16 to 7 5/16 after Qualcomm said it will integrate the company's voice communications technology in Qualcomm's Eudora e-mail technology.

pcOrder.com gained 1 13/32 to 6 9/32 on news of a million-share stock buyback.

Network Appliance beat estimates by a penny with 9-cent earnings, but the stock fell 6 3/8 to 84 3/8 on backlog concerns.

Sonus Networks gained 13 1/2 to 211 1/2 after announcing a 3-for-1 stock split.

Digital Think bolted 7 7/8 to 42 1/2 on a Goldman Sachs Trading Buy rating and $50 6-month price target.

USinternetworking gained 15/16 to 12 11/16 on a Lehman Brothers Buy rating. Interliant , which received an Outperform rating, slipped 3/16 to 14 15/16.

Verio gained 1/4 to 59 1/2 after beating estimates by a penny with a $1 per share loss. President Clinton has until Aug. 29 to sign off on the company's merger with Japan's NTT. The FBI signed off on the deal recently, but The Washington Post reported that federal officials still have some national security concerns about the deal.

i2 fell 6 1/2 to 148 1/8, negating yesterday's breakout above 150. The stock's advance was stopped by a higher resistance line at 155.

Value America continued to be halted at 23/32 after the online retailer filed for Chapter 11 bankruptcy. Nasdaq said it is waiting for more information from the company before reopening trading. The company is discontinuing its e-tailing operations and reducing staff, and will focus instead on its electronic services business. For more on the story, click here.

Portal Software rose 1/4 to 51 1/18. The stock fell 10% yesterday on concern about the company's earnings, which will be reported on Thursday.

Some technical comments on the market: The Dow needs to stay above the 10,950-10,975 area to preserve the upside break of the diamond formation. As we said yesterday, the breakout came on volume that was too low for comfort, and technical indicators on the index were overbought. Today's pullback is resolving some of that, but it is disconcerting that volume is up substantially on the downside move. Not a lot to like about the breakout. Resistance is just under 11,200. Home Depot disappointed analysts today with in-line earnings, and Hewlett-Packard reports earnings tomorrow after the close. The Nasdaq appears to be stuck in a narrowing trading range, and has yet to establish firm direction either way. The index may be forming a bearish flag pattern in t