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RealTime IT News

Consumer Confidence Rubs Off On Investors

Wall Street expected the worst from March's Consumer Confidence Index on Tuesday. What investors got instead was a surprisingly upbeat CCI number and a fourth consecutive day of gains for tech and Internet stocks.

'Net tickers led all advancers, with internet.com's Internet Stock Index, or ISDEX, climbing 3.0% to 229. The Dow Jones rose 260.01 to 9947.54, a 2.7% increase, while the Nasdaq gained 53.74, or 2.8%, to 1972.23. The S&P 500 moved up 29.48, or 2.6%, to 1182.17.

Tuesday's key catalyst was the Consumer Confidence Index, which reversed a five-month decline by rising eight points in March to 117. Economists had expected a dip to about 105 from February's 106.8.

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Seven of 13 Internet sectors had more gainers than losers Tuesday, with the e-tail group showing an even split. For all sector breakdowns, visit WSRN's Internet sectors page.

Wireless handheld device maker Handspring soared 26.3% to $16.19 after announcing a distribution agreement with global technology distributor Ingram Micro for its Visor handheld computers.

Caching appliance vendor CacheFlow rose 25.3% to $5.88 on news of an alliance with e-commerce software provider WebTrends to offer common customers integration between WebTrends' customer analysis products and CFLO's content delivery architecture. WEBT inched up a more modest 2.5% to $10.25. Despite its big day, CFLO remains close to its all-time low of $3.50.

Troubled Webzine Salon.com got a big dead-cat bounce after hitting an all-time low closing price on Monday of 22 cents per share. SALN zoomed up 72.7% to 38 cents on Tuesday.

Things have gone from bad to worse for Web consultant MarchFirst and its investors. Just four days after announcing it had closed its venture capital operation, MarchFirst said Tuesday it was laying off 3,500 workers, about half its workforce. In response, shares plummeted 36% to 16 cents.

MRCH has lost 99.6% of its value since closing one year ago Tuesday at $41.13. This year alone, the stock - which finished Dec. 29 at $1.50 - is down 89.3%. On March 12, the company said chairman and CEO Robert Bernard and two other executives had quit.

Benefiting from the woes of competitors MarchFirst and Viant - which on Tuesday also announced layoffs, along with a warning of wider-than-expected Q1 losses - Braun Consulting gained 44% to $4.19. Braun had been mentioned by industry analysts nearly two weeks ago as a potential buyout target of Electronic Data Systems.

Here's Paul Shread's technical analysis:

March 27, 4 p.m.: A very impressive rally so far. The S&P 500 took out some pretty significant resistance at 1180 today (first chart). Next resistance level is 1191-1198 and then 1214-1215, a critical level. Support should be found at 1171, 1160, 1150, and in the 1117-1130 range. The Nasdaq 100 broke out of what could be a falling wedge bottom today, and the Nasdaq did the same (second and third charts). Both indexes may also be forming inverse head and shoulders bottoms in the intraday charts (fourth and fifth charts), with about 150 points of upside potential. The 1700 (Nasdaq 100) and 1900 (Nasdaq) levels should now provide support. The Dow has taken out an awful lot of resistance (sixth chart), but also closed almost exactly at the 50% retracement level of its 10,850-9100 decline, suggesting a possible pullback here. The 9732-9860 level should now provide support, then 9650 and 9400-9500. And finally, the seventh chart, the treasury yield curve, has come very close to uninverting the last two days, a bullish sign for stocks. It's not quite there, but that's the best it's looked in a year. Don't fight the yield curve. A pullback is probably due in the next day or two, but the major indexes look the best they have in some time. Let's hope they stay that way.