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Stocks Rise On Economic Stimulus Talk

Stocks pulled out of strong declines on Friday after President Bush discussed the administration's plans for stimulating the economy.

The ISDEX http://www.wsrn.com/apps/ISDEX/ rose 1 to 128, and the Nasdaq climbed 7 to 1605. The S&P 500 added 1 to 1071, and the Dow gained 58 to 9119. Volume declined to 1.31 billion shares on the NYSE, and 1.83 billion on the Nasdaq. Advancers led by a few shares on the NYSE, and decliners led 19 to 16 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.

Traders shrugged off a much weaker than expected jobs report and an earnings warning from Sun Microsystems to buy on the Bush news. They also bought Sun, sending it up .58 to 9.87 after initially sending the stock lower.

McData slipped .25 to 12.47 on a warning, but Micromuse surged 1.70 to 9.13 on its warning.

Cisco climbed .53 to 14.95 despite comments from Lehman Brothers that tough times will continue for another 4-6 months. Juniper surged 2.06 to 15.33.

Aether and AMD declined on earnings warnings, but Gateway and BMC rose on their warnings.

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 nice recovery today, but caution is advised. Looking at the 60-minute charts off the September 21 bottoms, the S&P 500 (first chart) broke down out of a rising wedge and then rose along the underside of the broken trendline, which should mean more downside ahead. Rising at about 10 points a day, that broken trendline should be at about 1080 on Monday. Support can be found about every 10 points down to critical support at 1020. A break below 1020 would confirm this as a bear rally. The Dow (second chart) broke down, but managed to close back inside that trendline; that's a plus, but the index has no room for downside on Monday. First support is 9050, first strong support is 8850, and critical support is 8700. For the Nasdaq (third chart), first support is 1580, then 1550, and critical support is 1530. Next week, particularly around October 11, is a very important cycle turn window that could result in a strong move either way. One very big negative is the Banking Index (fourth chart), which plunged out of a bearish rising wedge today. Another day like that on Monday would be very bearish for the leading financial stocks, and likely for the market as a whole.

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.