RealTime IT News

The Chips Are Up

A strong rally in semiconductor stocks led the market higher on Wednesday.

The ISDEX http://www.wsrn.com/apps/ISDEX/ recovered 1 to 168, and the Nasdaq climbed 28 to 1860. The S&P 500 gained 8 to 1165, and the Dow rose 102 to 10,276. Volume rose to 1.1 billion shares on the NYSE, and 1.5 billion on the Nasdaq. Advancers led 18 to 12 on the NYSE, and 20 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.

After the close, Ciena surged on news that it will be added to the S&P 500. Synopsys plunged on an earnings warning.

A better than expected semiconductor equipment book-to-bill ratio boosted shares of chip stocks more than 5%. Merrill Lynch cheered the report, but CS First Boston said the gains are not sustainable. Intel rose .87 to 27.94, and Vitesse climbed .88 to 14.11 on optimism that the company will make its quarter.

Semtech , Intuit and Triquint all soared on better than expected earnings news.

eBay recovered from an early plunge on rumors that the company will make a dilutive acquisition to close down .91 to 57.01.

Interwoven surged 1.08 to 7.34 on a Merrill Lynch upgrade.

Excite@Home recovered .16 to .56 after firing the auditors who said the company's survival is at stake.

Qwest , off 1.22 to 22, continued to fall on accounting issues.

Lucent rose .17 to 6.68 ahead of an analyst meeting tomorrow.

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

Two negatives today in an otherwise modestly constructive day: New lows trounced new highs on the Nasdaq, suggesting that the rally in tech was a thin one, and the Dow could be forming a bear flag on the intraday charts (first chart). The Dow also ran into resistance at its main downtrend line today (second chart). A move above 10,300 tomorrow would be a plus, 10,240 is first support, and 10,120-10,175 is critical support. The Nasdaq (third chart) closed right at 1860 resistance today, the old falling wedge boundary. Next resistance is 1880, and critical support is 1817. The S&P 500 (fourth chart) faces a whole lot of resistance at 1175 tomorrow, and critical support is 1156. Tomorrow is a potential cycle turn day. Watch for the market's reaction when the minutes of the Fed's last meeting are released at 2 p.m.

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.