RealTime IT News

Accounting Woes Mount

Accounting worries led to yet another sharp decline on Wall Street on Monday.

The ISDEX http://www.wsrn.com/apps/ISDEX/ fell 10 to 164, and the Nasdaq lost 55 to 1855. The S&P 500 declined 27 to 1094, and the Dow dropped 220 to 9687. Volume rose to 1.45 billion shares on the NYSE, and 1.77 billion on the Nasdaq. Decliners led by 22 to 9 on the NYSE, and 26 to 9 on the Nasdaq.

After the close, Dell slipped after reaffirming estimates but saying that demand remains weak. The company also suggested that Compaq and Hewlett-Packard may be stuffing the channel to improve results and their merger chances.

During the day, Tyco , Elan , Enterasys and Amazon led the accounting worries parade. Even GE has been hit by accounting concerns lately.

Priceline plunged 23% after beating estimates but lowering revenue guidance.

Hewlett-Packard edged higher after raising guidance.

Synopsis surged on a bullish outlook.

Ciena fell 15% on downgrades.

Some technical comments on the market: Note: To see the charts in the text email newsletter, click on the internetstockreport.com story link at the top of the newsletter.

The Dow (first chart) formed a bearish evening star reversal pattern (white day, doji star, red day) with today's big move down. That should be good for at least some follow through to the downside. 9530 was the recent low on the index, and 9710-9750 is first resistance. The next good support for the S&P (second chart) is the 1075-1085 range. 1098 is first resistance, and 1110-1117 is tough resistance. As we said on Friday, the S&P looks like it has minimum downside in this correction to 1052. The Nasdaq (third chart) is sitting right on a critical level, 1850; 1820-1825 is first support below that, and 1910 or so looks like tough resistance. One thing missing from this market is a sign that it is undervalued: heavy insider buying, cash takeovers, and company stock buybacks are the kinds of things that could help reverse this confidence crisis, which appears to be a serious one, and thus may continue for some time.

Special report: For a free introduction to technical chart patterns, visit http://www.internetstockreport.com/guest/article/0,1785,2571_500051,00.html.