RealTime IT News

Bulls Bounce Back

Stocks soared on Monday, as buyers showed up in force following last week's steep plunge.

The ISDEX http://www.wsrn.com/apps/ISDEX/ soared 8 to 121, and the Nasdaq surged 76 to 1499. The S&P 500 rose 37 to 1003, and the Dow stormed ahead 368 to 8603. Volume declined to 1.7 billion shares on the NYSE, and 2 billion on the Nasdaq. Advancers led 24 to 8 on the NYSE, and 27 to 11 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, AOL Time Warner slipped after issuing an earnings warning. Real Networks issued a stock buyback.

During the day, big-cap stocks like EMC , Sun , Oracle and Nokia led the charge.

Semiconductor stocks were strong, led by Intel , which soared 2.10 to 21.40. However, leading equipment stocks like Applied Materials and KLA-Tencor lagged.

VeriSign rose 1.41 to 39.71 after initially declining on news that it will acquire Illuminet .

JDS Uniphase surged 1.01 to 6.37 on a CIBC Buy rating despite issuing a revenue warning.

1-800-Flowers.com blossomed .88 to 10.89 after reaffirming guidance.

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

On a generally positive day, we'll start with two negatives. First, volume was light, which means that today's rally may be just a countertrend move. And second, the structure of the rally, particularly in the Dow and S&P 500 (see first two charts below) appears to be more of a bear flag than a genuinely bullish move, so more downside may yet be in store. On the Dow, critical support is 8440, and key resistance is 8750-8800, the index's old trading range (see third chart below). On the S&P, 985 is critical support, and 1010 is first resistance. On the Nasdaq (fourth chart), 1488 is first support, and 1459 is critical support, the top of today's gap up. 1500-1525 is first resistance. One plus was the strong buying in the economically sensitive sectors today - the banking index, the cyclicals, the Transports and the semiconductors all posted strong gains. But one other negative was that the options put-call ratio fell by more than half after Friday's record close; it would have been nice to have seen a little less belief in today's rally.

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.