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RealTime IT News

Stocks Climb A Wall Of Worry

Investors ignored negative comments about telecom equipment spending and news that Sun Microsystems will shut down for a week in July to send stocks higher on Wednesday.

The ISDEX http://www.wsrn.com/apps/ISDEX/ climbed 8 to 241, and the Nasdaq gained 43 to 2059. The S&P 500 added 19 to 1228, and the Dow surged 170 to 10,625. Volume rose to 1.36 billion shares on the NYSE, but slipped to 1.94 billion on the Nasdaq. Advancers led 20 to 10 on the NYSE, and 23 to 14 on the Nasdaq. 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.

After the close, PurchasePro , which lost a third of its value during the day on an earnings warning, postponed its earnings report until tomorrow morning. The company announced a new CFO yesterday.

Also after the close, Qualcomm met estimates of 29 cents a share but lowered forward estimates. Homestore.com beat estimates with 4-cent earnings and raised forward guidance. Also topping estimates were InfoSpace , PeopleSoft , and JNI . Foundry matched estimates, while New Focus missed by 2 cents with a 4-cent loss.

During the day, Amazon.com added .27 to 15.95 after beating estimates by 4 cents with a 21-cent loss. The company said it expects to be break-even by the end of the year, but analysts debated whether that was possible and whether the company's business lines are growing fast enough. GoTo.com soared 3.78 to 15.32 after beating estimates and guiding forward estimates higher. BroadVision slipped .05 to 5.16 after beating by a penny. Applied Micro , up .08 to 24.06, matched lowered estimates.

Ciena , Juniper and Cisco didn't participate in the rally after analysts said recent reductions in CapEx spending reflect a worsening environment and pricing pressures for telecom equipment firms. Sun lost 1.03 to 16.05 after announcing it will shut down for a week in July, an unprecedented cost-cutting step.

Ticketmaster surged 1.46 to 10.70 after blowing out estimates by 4 cents with 5-cent earnings. Speechworks added .85 to 12.75 despite coming in light on revenues. Virata slipped .16 to 13.31 after missing estimates by 2 cents with a 23-cent loss.

Some technical comments on the market: Note: We include 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

Mixed signals in the market today, and a good thing too, because they were looking all negative yesterday. First, an interesting study in using different timeframes. According to the first three daily charts, the Dow, S&P 500 and Nasdaq all recovered their uptrends that were broken yesterday. But looking at the hourly charts, the second set of three charts, the indexes did not recover those lines. Per the hourly chart, that line marking the Nasdaq's sharp uptrend since April 4 will be at about 2150 tomorrow, so the index isn't likely to catch it. However, the held Nasdaq 2000 today, the top of a breakout gap; that's very constructive action. And the index broke out of a falling wedge or bull pennant (the blue lines), which could carry the index as high as 2200-2250. Not a bad day at all; we'll see if the Nasdaq can build on it tomorrow. A move above the 2250-2300 area would be bullish, but a failure below that level would be bearish. The S&P 500 held its breakout gap at 1200 today, and could be headed back to the 1250-1300 area. A move above 1300 would be bullish, but a failure below there would be bearish. The Dow broke out of a bull flag today, and could be head for the important 10,859 level, where its steep sell-off began. One more level we do not want to see this rally fail to clear. This rally is entering make-or-break territory. Two potential longer-term negatives: the Dow Transports and NYSE advance-decline line are both making lower highs here, a sign that this rally may not have the breadth to be lasting.

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



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