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Stocks Fall On Fed Worries, Persian Gulf Tensions

Stocks fell in lighter trade on Friday, as investors worried about next week's Federal Reserve meeting and Persian Gulf terrorist threats.

The ISDEX http://www.wsrn.com/apps/ISDEX/ slipped 5 to 222, and the Nasdaq lost 23 to 2034. The S&P 500 fell 11 to 1225, and the Dow dropped 110 to 10,604. Volume declined to 1.19 billion shares on the NYSE, and 1.71 billion on the Nasdaq. Decliners led 18 to 12 on the NYSE, and 21 to 15 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.

Micron Technology gained .67 to 38.38 despite missing estimates by 36 cents with a 50-cent loss. But disappointed investors punished Symantec , off 22.02 to 39.09, on an earnings warning, and Manugistics , down 10.68 to 25.69, on a disappointing earnings report. i2 lost 1.80 to 16.49.

Research In Motion slipped .91 to 28.49 despite matching estimates and reaffirming guidance.

Semiconductor equipment firms rose despite another negative book-to-bill report. Applied Materials climbed 1.57 to 49.19, and Novellus rose 1.60 to 51.97.

Telecom stocks had a rare strong day, on comments from Wit SoundView and Robertson Stephens that the stocks had been beaten down too much. JDS Uniphase rose .89 to 11.80, Nortel climbed .28 to 8.73, Tellabs surged 1.25 to 17.65, Optical Communications added .69 to 11.25, Sycamore rose .61 to 8.52, and Global Crossing surged 1.25 to 9.01.

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

A lower-volume sell-off today, with no technical damage. The Nasdaq (first chart) seems to be fighting rising resistance here, which is a sign of potential further downside. First resistance is 2077, key resistance is 2125, and 1973 is critical support. The S&P 500 (second chart) faces a whole lot of resistance at 1250; a break above that level would be a big plus. 1200 is key support. The Dow (third chart) is still bounded by 10,700 resistance, and is having a tough time at a downtrend line. 10,870 is critical resistance, and 10,560 is important support. Today was the final day of a turn window; let's see which way it goes on Monday for short-term direction. The next turn window coincides with the Fed meeting; we'd prefer to see the market flat to down into that meeting, giving more room for upside out of the announcement.

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.