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Nasdaq Puts Together A Winning Streak

The Nasdaq shook off a dismal profit outlook from Yahoo to post its first three-day winning streak since September 1 on Thursday. But investors turned fickle again after the bell, as Ariba traded lower despite blowing away earnings estimates and raising forward guidance.

The ISDEX http://www.wsrn.com/apps/ISDEX/ surged 21 to 380 during the day, and the Nasdaq soared 116 to 2640. The S&P 500 rose 13 to 1326, and the Dow tacked on 5 to 10,609. Volume rose to1.4 billion shares on the NYSE, and 2.8 billion on the Nasdaq. Advancers led by 16 to 12 on the NYSE, and 27 to 11 on the Nasdaq. The Producer Price Index for December will be reported tomorrow. For earnings reports, visit our earnings calendar at http://www.wsrn.com/apps/earnings/internet.xpl and reported earnings at http://www.wsrn.com/apps/earnings/ireported.xpl. For after hours quotes and news, visit our after hours trading site at http://www.afterhourstrading.com.

It was a very busy after-hours session. Ariba blew away earnings estimates after the bell, reporting 5 cents a share instead of the 2 cents analysts expected, and the company raised forward guidance. But traders sent the stock 3 points lower to $40. Also after hours, DoubleClick rose 1 to 12 after beating reduced estimates but warning about first quarter results. Rambus missed estimates by a penny, and Hewlett-Packard and Gateway issued earnings warnings.

During the day, Yahoo fell 4 7/16 to 26 1/16 after meeting earnings estimates of 13 cents a share. Revenues for the quarter came in $4 million light at $311 million. But the company's outlook for the year was what really caught analysts by surprise: Yahoo said full-year earnings will come in at 33-43 cents a share due to economic weakness, well under analysts' 57-cent estimate. The company also guided full-year revenues down to $1.2-$1.3 billion from estimates of $1.4 billion.

eBay shook off Yahoo's earnings warning to rise 1 9/16 to 40 7/8, continuing to gain on a positive presentation by CEO Meg Whitman.

Cisco recovered 1 3/4 to 38 a day after saying that the slowdown in capital equipment spending was affecting the company. Juniper Networks , up 10 to 129 13/16, has been stealing market share from Cisco. Juniper reports earnings Tuesday.

Broadcom , a major Cisco and Motorola supplier, rose 4 5/16 to 114 1/4 despite anemic profit news from both companies.

Rational Software surged 6 1/16 to 45 3/16 after the company's 20-cent earnings beat estimates by 2 cents. SG Cowen downgraded a host of Internet enabling software stocks on recent weakness in business, including Rational Software, BroadVision , off 3/8 to 14 13/16, Vignette , up 15/16 to 13 7/16, BEA Systems , up 3 15/16 to 60 3/16, Serena , down 9/16 to 29, and TIBCO , up 2 7/8 to 42 1/2.

Digital River rose 1 5/8 to 4 3/4 after pre-announcing better than expected results and saying it expects to achieve profitability in the first quarter.

Extended Systems soared 4 11/16 to 19 1/16 after pre-announcing better than expected results.

PurchasePro rose 2 1/4 to 18 on a deal with Honeywell , which is being acquired by GE .

Audiohighway.com , halted at 3/8, filed for Chapter 11 bankruptcy protection.

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