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RealTime IT News

Ruling Goes Microsoft's Way

An already positive day for stocks got a boost Thursday on news that an appellate court threw out the Microsoft breakup order.

Stocks were also boosted by a strong weekly jobs report that gave traders hope that six months of Fed rate cuts will soon begin to benefit the economy.

The ISDEX http://www.wsrn.com/apps/ISDEX/ rose 4 to 238, and the Nasdaq surged 50 to 2125. The S&P 500 climbed 15 to 1226, and the Dow rose 131 to 10,566. Volume rose to 1.31 billion shares on the NYSE, and 1.95 billion on the Nasdaq, despite a three-hour halt in Microsoft trading. Advancers led 18 to 12 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 bell, PMC-Sierra rose after issuing an earnings warning, the latest communications chip company to do so.

During the day, Microsoft rose 1.56 to 72.60 after the appellate court overturned a lower court order to break up the software giant. However, the appeals court agreed that Microsoft illegally defended its Windows monopoly, and sent the case back to the lower court for a new remedy, and also removed Judge Thomas Penfield Jackson from the case.

Cisco rose .72 to 18.65 after being named one of Lehman Brothers' 10 annual Uncommon Values, but gave back some gains on rumors that it might issue an earnings warning. Check Point also lost ground on rumors of an earnings warning.

Ciena lost 2.34 to 36.75 on rumors that TyCom might cut capital spending.

I-many dropped 2.81 to 13.10 on negative comments from Robertson Stephens.

i2 , up 1.51 to 19.50, continued to rise on hope that any earnings warning will be better than expected.

Riverstone Networks climbed 1.64 on positive comments from CS First Boston.

Redback lost 2.67 to 8.64 on an earnings warning.

Oracle surged 1.14 to 19.18 on the heels of a positive analyst day.

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 strong day - except the only index to finish the day looking strong was the Nasdaq 100 (first chart), which broke out above its head and shoulders neckline, only to be stopped by a downtrend line. A breakout or a fakeout? That downtrend line is the key, and a move above 1850 would take that line out with room to spare. One plus is that today's gap and one two weeks may have created an island reversal on the Nasdaq 100 (see arrow on the chart), indicating the potential for a move higher. The Nasdaq (second chart) finished the day below its neckline after breaking above it; 2138 would likely clear that line and the 50-day moving average. The S&P 100 (third chart) cleared a downtrend line during the day, only to close below it. 642 is key resistance, and 623 is critical support. The S&P 500 (fourth chart) faces a whole lot of resistance at 1250-1260; a break above that level would be a big plus. 1200 is key support. And the Dow (fifth chart) rallied more than 100 points today and still couldn't clear its most basic downtrend line. The old economy stocks look weakest here.

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.