RealTime IT News

Stocks Slip Ahead Of Fed Meeting

Stocks pulled back in light volume on Monday, ahead of Tuesday's decision by the Federal Reserve on interest rates.

The ISDEX http://www.wsrn.com/apps/ISDEX/ slipped 2 to 111, and the Nasdaq lost 18 to 1480. The S&P 500 declined 2 to 1038, and the Dow gave back 10 to 8836. Volume fell to 1.17 billion shares on the NYSE, and 1.49 billion on the Nasdaq. Decliners led 18 to 12 on the NYSE, and 22 to 13 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, Compaq and Mercury Interactive were among those warning.

During the day, the NAPM survey showed better than expected strength in manufacturing, but the post-September 11 picture was unclear. Construction spending fell more than expected, and August personal income and spending was lower than expected.

Security stocks took center stage during the day. Internet Security surged 3.04 to 12.15 after reaffirming guidance, but RSA Security plunged 2.53 to 10.93 on a warning.

Intel and AMD slipped on negative comments from Merrill Lynch.

SunGard Data fell 2.84 to 20.53 on an earnings warning.

Excite@Home was halted after following Exodus into bankruptcy.

Cisco and EMC remained under pressure.

Virata and Globespan fell on news that the two will merge.

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

Tomorrow-Wednesday is a cycle turn window, and with the Dow and S&P 500 overbought on a short-term basis heading into the turn, the odds are that near-term direction will be down. The next big turns are shaping up to be October 11 and October 22. The Dow and S&P (first two charts) continue to form bearish rising wedges off the September 21 lows, another negative here. However, Friday's up day qualified as a follow-through rally, so the bulls have something to build on, if they can. Resistance on the Dow should be at about 9000 tomorrow, and support is 8750. Resistance on the S&P should be found at 1060, and support at 1040; the S&P will need to rise tomorrow just to hold that lower trendline. The Nasdaq (third chart) remains the weakest of the Big Three indexes, and is trapped in a very narrow triangle. A break of 1480 or 1440 tomorrow should dictate direction. The Fed decision on interest rates will be announced at 2:15 p.m. Eastern time.

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.