RealTime IT News

Stocks Wobble But They Don't Fall Down

Stocks fell on earnings warnings from Altera and WorldCom on Wednesday, but pared their losses considerably by the close. Internet stocks continued to outperform, finishing the day down fractionally.

The ISDEX slipped less than a point to 621, and the Nasdaq declined 36 to 3333. The S&P 500 dropped 8 to 1421, and the Dow lost 71 to 10,899. Volume declined to 1.2 billion shares on the NYSE and 2.01 billion on the Nasdaq. Advancers led by a hair on the NYSE, but decliners led 21 to 18 on the Nasdaq. The National Association of Purchasing Management survey showed economic contraction for the third straight month. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our after hours trading site.

Internet stocks' outperformance was attributed to the end of tax-loss selling by fund managers, a theory that was supported by the same five stocks that led the ISDEX all day: CMGI , up 4 to 20 7/8, WebMD , up 1 to 12 3/8, InfoSpace , up 3 to 23 1/16, DoubleClick , up 2 1/4 to 18 1/2, and Yahoo , up 5 3/4 to 64 3/8.

Internet infrastructure leaders were weak on the WorldCom news, which added to fears that telecom service providers will cut capital spending. Cisco Systems , which reports earnings Nov. 6, slipped 1 3/8 to 52 1/2. Thomas Weisel reiterated Strong Buy on Cisco, saying the firm believes Nortel's problems are company-specific. JDS Uniphase lost 2 3/4 to 78 3/4, Corning was off 3 1/4 to 73 1/4, and Juniper Networks dropped 11 1/2 to 183 1/2.

Red Hat surged 2 7/8 to 15 3/8 on comments from a Microsoft official that Linux on the PC represents the greatest threat to the software giant.

Covad tacked on 5/8 to 5 29/32 after announcing the resignation of Robert Knowling as chairman, CEO and president. Frank Marshall has been named interim CEO, and founder Charles McMinn was named chairman.

Earthlink lost 1/4 to 6 1/4 on a Goldman Sachs downgrade to Market Perform from Outperform, on weaker organic narrowband growth.

ClickSoftware added 5/8 to 3 11/16 on a partnership with i2 , which gained 1 1/2 to 171 1/2.

Lionbridge slipped 3/4 to 9 1/8 despite beating estimates by 2 cents with a 2-cent loss. Stamps.com , off 5/8 to 3 1/4, beat estimates by 5 cents with an 80-cent loss. But @Plan rose 1 1/16 to 5 15/16 on a modest earnings warning.

ONI Systems lost 7 13/16 to 73 1/4 despite beating estimates by 4 cents with a 14-cent loss.

Some technical comments on the market: Note: We are now including charts in the technical market commentary. If you can't get the charts via the e-mail newsletter version, try this link: http://www.afterhourstrading.com/column.html

Special report: For a free introduction to technical chart patterns and an overview of this year's action in the stock market, visit http://www.internetstockreport.com/guest/article/0,1785,2571_500051,00.html.

We finally got a follow-through day yesterday, on the ninth day of the Nasdaq's attempted rally. Today started out a little worse than we would like to have seen, but the market came back nicely by the close, so we'll call it a pullback in an uptrend. I