RealTime IT News

Stocks Rally On Rate Cut #9

Stocks rose in higher volume after the Federal Reserve cut interest rates by 50 basis points, the ninth rate cut this year.

The ISDEX http://www.wsrn.com/apps/ISDEX/ rose 2 to 113, and the Nasdaq climbed 11 to 1492. The S&P 500 added 12 to 1051, and the Dow surged 113 to 8950. Volume rose to 1.28 billion shares on the NYSE, and 1.78 billion on the Nasdaq. Advancers led 20 to 10 on the NYSE, and 19 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, Priceline and Kronos surged on positive preannouncements, but the after-hours session was otherwise dominated by earnings warnings. Nortel , Openwave and TMP Worldwide were among those warning.

During the day, Siebel rose 2 to 15.05 after it didn't warn during an analyst meeting.

Expedia surged 3.99 to 27.99 after USA Networks said it plans to complete the acquisition despite a post-September 11 decline in bookings. Expedia parent Microsoft rose 1.11 to 52.90.

Texas Instruments fell 1.85 to 23.14 on rumors that it will warn.

Metromedia Fiber soared .37 to .70 after saying it expects to be EBITDA positive next year.

Applied Materials led a generally weak semiconductor sector lower after Lehman Brothers cut estimates.

Comverse fell 2.05 to 15.65 on a Merrill Lynch downgrade.

Compaq slipped on an earnings warning, but Mercury Interactive surged 3.76 to 22.50 despite warning.

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

Another follow-through rally on the NYSE today. Not bad, but we should probably point out that the market had three follow-through days in January and still topped out just days later, so that's not a good indicator on its own. More impressive would be negated rising wedges on the Dow and S&P, which happened at 10,300 on the Dow at the start of the big April rally. The Dow went on to gain 1,000 more points before topping out in late May. But our best guess is that's not too likely to happen here. Tomorrow is a cycle turn date, and the Dow and S&P 500 are overbought heading into it, making a turn down in the next day or two likely. The Dow and S&P (first two charts) continue to form bearish rising wedges here, suggesting that a retest of the lows may be in store, and potentially a decline to as low as 6900 on the Dow. 9000 is resistance on the Dow tomorrow; a powerful move up through that level would call the bear case into question. Support on the Dow is just under 8900 tomorrow. The S&P faces a lot of resistance in the 1060-1080 range, and 1050 should be support tomorrow. The Nasdaq (third chart) broke out of a symmetrical triangle today, but remains surprisingly weak. With the semiconductors down 2% today and sitting just above their recent lows, it's not looking great for the techs here. Support is 1490 and then 1445 tomorrow, and resistance is 1500-1505 and 1528.

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