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Irrational Exuberance Returns

Irrational exuberance returned to the stock market this week, as the Nasdaq gained 15% between Wednesday's low and Friday's close.

In Friday's trading, the ISDEX gained 15 to 670, and the Nasdaq rose 64 to 3483. The S&P 500 climbed 8 to 1396, and the Dow rose 83 to 10,226. Volume declined to 1.1 billion shares on the NYSE and 2.1 billion on the Nasdaq. Advancers led by 15 to 12 on the NYSE and 23 to 15 on the Nasdaq. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our after hours trading site.

eBay , up 3/8 to 57 9/16, and Commerce One , up 6 1/8 to 70, both beat estimates by 3 cents after the close on Thursday, eBay with 4-cent earnings and Commerce One with a 9-cent loss.

E.piphany soared 25 1/8 to 89 7/8 after beating estimates by 15 cents with a 17-cent loss and declaring a 3-for-2 stock split. But Exodus Communications lost 4 1/16 to 34 despite beating estimates, and Ventro , off 1 5/8 to 4 5/16, missed revenue estimates. Open Market rose 15/16 to 4 1/16 despite missing estimates.

Register.com added 7/8 to 7 3/4 after beating estimates by 8 cents with a break-even quarter. GoTo.com , up 1 11/16 to 12 3/4, beat estimates by 11 cents with a 22-cent loss. JDS Uniphase bolted 12 9/16 to 102 1/2 after merger partner SDL posted blow-out numbers. Critical Path rose 4 15/16 to 57 on better-than-expected numbers, and Scient added 3 7/8 to 22 1/16 after beating reduced estimates.

Homestore.com beat estimates by 2 cents with 1-cent earnings, but the stock was off 3 3/8 to 26. NetIQ soared 13 1/2 to 92 after beating estimates by 6 cents with 16-cent earnings. Digital River , up 2 to 6 3/8, and Packeteer , up 6 3/16 to 26 1/4, also beat estimates. Packeteer posted a surprise 1-cent profit, 3 cents ahead of estimates. Kana Communications , up 7 1/8 to 26 1/4, beat estimates by a penny with a 22-cent loss.

Ticketmaster Online , off 1/16 to 12, MP3.com , off 5/8 to 4, and InsWeb , up 1/16 to 2, all beat estimates. AutoWeb , off 1/4 to 3/4, missed by 15 cents with a 29-cent loss.

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

One last look at our charts from yesterday. The sell-off's failure to fill the Nasdaq's October 1999 gap at around 2900 is very significant: it implies that the primary trend even throughout this year's steep sell-off was bullish. Why? Because it was a major breakout gap, and the market's failure to fill it means the bullish trend is still intact. As we said repeatedly, old tops make good bottoms: everyone who missed the Nasdaq's extraordinary run-up from October 1999 to April 2000 got a second chance to get in. This is how bears become bulls. The volume and force behind Nasdaq 3000 is now similar to that around Dow 7500 from October 1997 to October 1998. It's now support to be reckoned with. If that gap ever fills, we'll know we're in trouble.

The Nasdaq finally took a breather this afternoon. The ind