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RealTime IT News

The Fed Comes Through

The Federal Reserve came through with an expected 50-basis point rate cut on Wednesday, but the market's initial reaction was muted.

The ISDEX http://www.wsrn.com/apps/ISDEX/ rose 4 to 443, and the Nasdaq slipped 3 to 2834. The S&P 500 lost 1 to 1372, and the Dow rose 12 to 10,893. Volume declined to 480 million shares on the NYSE, and 945 million on the Nasdaq. Advancers led 17 to 11 on the NYSE, and 19 to 14 on the Nasdaq. Fourth quarter GDP came in much lower than expected at 1.4%, the slowest rate of growth for the economy in six years. 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.

AOL Time Warner , up 1.30 to 55.61, matched 15-cent estimates and affirmed full-year views. On a combined basis, the companies earned 28 cents a share.

Amazon.com fell 1 11/16 to 17 1/4 after beating estimates by a penny with a 25-cent loss, but the company warned that first quarter revenues will be 15-20% below estimates. Amazon said it will cut 1,300 jobs, or 15% of its workforce, and said it still expects to reach profitability by the end of the year.

Adobe , off 7 3/16 to 45 9/16, and Applied Materials , down 3/4 to 52 3/4, also warned. Advanced Fibre rose 3 15/16 to 24 1/2 after beatings estimates, but Aware , off 4 to 16 7/8, and PeopleSoft , down 6 5/8 to 42 5/16, didn't fare as well despite than expected results.

RealNetworks , up 1/8 to 10 7/8, matched estimates. Digital Island , up 1/2 to 6 1/2, said it expects to breakeven by mid-2002 and has the cash to get there.

Broadcom rose 6 1/4 to 119 3/4 on rumors of a deal with Cisco .

New Focus soared 10 3/4 to 60 1/8 after blowing away estimates by 7 cents with 4-cent earnings. TIBCO dropped 5 3/16 to 40 11/16 on negative comments from Morgan Stanley.

DiamondCluster , up 4 1/16 to 36 3/4, matched estimates and lowered forward guidance. F5 Networks , up 1 15/32 to 17 3/32, topped estimates, as did Oplink , up 1/16 to 19 15/16, and Digital Impact , up 1/2 to 4 5/8.

PurchasePro climbed 1 19/64 to 28 3/4 on an expanded relationship with AOL Time Warner, including PPRO's first offline advertising campaign.

Genuity , off 3/16 to 3 15/16, met estimates but lowered forward guidance. eLoyalty climbed 57/64 to 9 7/8 on a positive preannouncement.

NetPerceptions , off 1/8 to 3 7/16, and Autoweb.com , down 1/16 to 15/32, both fell on earnings warnings. LifeMinders , down 3/4 to 3, missed estimates by a wide margin.

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

Note: The technical commentary was written before the Federal Reserve decision on interest rates. It will be updated for the market close. Also, there will be no technical commentary tomorrow; it will return on Friday. As we've been saying for the last two days, the market has been setting up for a big run on further Federal Reserve rat