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Stocks Weak On Anthrax Scare, Economic Reports

Stocks recovered well off their lows on Friday after plunging on weak retail sales and an anthrax scare.

The ISDEX http://www.wsrn.com/apps/ISDEX/ rose 2 to 146, and the Nasdaq added 1 to 1703. The S&P 500 lost 5 to 1091, and the Dow fell 66 to 9344 after having been down by more than 200 points. Volume declined to 1.33 billion shares on the NYSE, and 2.18 billion on the Nasdaq. Decliners led 18 to 12 on the NYSE, and 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 focused on a much weaker than expected September retails sales report, and ignored a much better than expected Michigan consumer sentiment reading. But the big focus of the day was on a dermal anthrax case at NBC News headquarters in New York.

A better than expected earnings report from Juniper boosted tech stocks. Juniper soared almost 27%. Ciena rose 1.64 to 16.88, while other networking stocks posted modest gains.

DoubleClick rose .65 to 8.14 after meeting estimates, and Sonus climbed .14 to 3.60 after it met estimates. RSA slipped .18 to 10.75 after missing estimates, but Powerwave surged 3.12 to 13.62 despite missing estimates.

Network Associates added .20 to 18.20 after beating estimates, and Storage Tech surged 2.03 to 15.08 after preannouncing that it will beat estimates.

Vignette fell 1.04 to 4.26 on a 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

The bulls survived to fight another day. The Dow and S&P held on to their redrawn trendlines today, but not by much. Critical support for Monday is now 9250-9300 on the Dow, and 1080-1085 on the S&P. Resistance is 9432 on the Dow and 1099 on the S&P. The Nasdaq continues to be the strongest-looking of the major indexes. The Nasdaq held critical 1641-1649 support today. First resistance is 1708. Click on those links to see those charts. The indexes look like they could have one more leg up before correcting. However, the VIX, the options volatility index, put in a pretty reliable candlestick reversal pattern today called a morning star (see chart below), the opposite of the pattern that has marked several Nasdaq tops during this bear market. Spiking volatility is a sign of fear, and usually means a falling stock market.

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.