RealTime IT News

Dow, Nasdaq Drop More Than 100 Points

Stocks rebounded off their lows on Friday, but the Dow and Nasdaq still finished with triple-digit losses. A strong September unemployment report and more earnings warnings from technology and Internet companies unsettled investors.

The ISDEX lost 29 to 674, and the Nasdaq fell 111 to 3361. The S&P 500 dropped 27 to 1408, and the Dow declined 128 to 10,596. Volume declined slightly to 1.1 billion shares on the NYSE and 1.8 billion on the Nasdaq. Decliners led by 19 to 8 on the NYSE and 28 to 10 on the Nasdaq. The economy added 252,000 jobs in August, above the 225,000 expected by analysts, and the unemployment rate dropped from 4.1% to 3.9%. Hourly wages came in better than expected at a 0.2% increase. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our after hours trading site.

Amazon.com dropped 1 15/16 to 31 5/8 on a rare Sell rating from Janney Montgomery Scott. Technical note: Amazon undercut 31-32 support today, trading as low as 30 3/16. The stock's low was 27 7/8 on July 31; a break below that low would be a real negative. As we mentioned recently, Amazon broke out of a falling wedge at about 35. That means the stock should have put in a bottom, but CMGI is an example that that's not always the case: the stock broke out of a falling wedge at 38 in August, but gave a warning when it broke below its July 31 low of 33 1/2 on September 25.

CMGI slipped 5/8 to 20 7/8 after the company clarified its cash position and on news of insider buying. The stock traded as low as 18 5/16 before the news. The company is burning cash at a rate of $63 million a month, but it has $654 million in cash and $1.6 billion in securities. CMGI said it expects its burn rate to decrease substantially over the next six months.

VerticalNet dropped 6 9/16 to 22 after Wedbush Morgan retained its Hold rating, but cut its price target from $50 per share to $30.

DoubleClick gained 1 1/16 to 24 7/8 on a Reuters report that the company could weather the Internet advertising downturn better than its competitors.

Net2Phone lost 2 1/2 to 22 1/2 on margin concerns despite beating estimates by a penny with a 29-cent loss.

Earnings warnings continued right on into earnings season, which begins in earnest next week. Marimba , off 5 1/2 to 5 5/8, Razorfish , down 3 25/32 to 4 31/32, iManage , off 2 1/4 to 3 3/4, and Snowball.com , down 1/4 to 1, all fell on earnings warnings.

Yahoo dropped 3 3/4 to 80 15/16. The company, which has sold off on earnings concerns, reports its results on Tuesday.

Inktomi lost 10 3/4 to 91 1/4. The stock may be forming a descending triangle, similar to one that Priceline broke down out of at 32. A close below 87 would be a big negative for Inktomi.

Some technical comments on the market: Note: We are now including charts with the technical market commentary; just click on the links in the story below to go to them. If you have trouble accessing the charts via the e-mail newsletter version, try this link: http://www.afterhourstrading.com/column.html

The Nasdaq pierced and closed below its critical support level, the