RealTime IT News

Stocks Rise Ahead of Fed Decision

Stocks rose ahead of the Federal Reserve's decision on interest rates due out at 2:15 p.m. Traders expected no change in rates or the Fed's tightening bias.

The ISDEX rose 6 to 575, and the Nasdaq surged 67 to 3205. The S&P 500 climbed 11 to 1394, and the Dow rose 98 to 10,779. Volume declined to 458 million shares on the NYSE and 720 million shares on the Nasdaq. Advancers led by 14 to 11 on the NYSE and by a few stocks on the Nasdaq. The Consumer Price Index will be reported tomorrow. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our after hours trading site.

Sycamore Networks , up 4 7/8 to 69 5/16, beat estimates by a penny with 1-cent earnings after the close, trounced revenue estimates, and guided estimates higher.

MP3.com soared 2 1/2 to 6 1/2 after settling a copyright infringement suit with Universal Music Group.

Internet advertising stocks were weak after Merrill Lynch analyst Henry Blodget said the fourth quarter is starting out softer than he expected, and said the weakness could remain through the first half of next year. He said America Online is the most insulated of the major Net companies, while Yahoo is more exposed. DoubleClick lost 2 1/16 to 16, Yahoo slipped 11/16 to 58 3/4, and AOL declined .26 to 49.64.

Juno Online , up 1/2 to 3 3/8, and Earthlink , up 1 7/16 to 8 9/16, rose on a Washington Post report that AOL and Time Warner are in talks to provide the ISPs access to cable lines in an effort to win government approval of their merger.

SmarterKids.com , off 1/8 to 1 13/16, will merge with privately-held Earlychildhood.com.

Covad slid 7/8 to 4 1/2 after announcing it will restate third-quarter results to reflect additional delinquent accounts.

Garden.com , off 5/32 to 3/32, announced it will shut down retail operations.

Ariba , off 1 13/16 to 96 15/16, continued to struggle at broken support at 100.

Some technical comments on the market: Note: We are now including 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 Nasdaq 100 continues to form a bearish pennant, and the break will likely come this afternoon if it is going to come. A strong move up following the Fed decision could negate that pattern, let's say up more than 100 points on high volume by the close. A breakdown could lead to a decline in the 2500-2750 range.

The ISDEX continues to form a potential broadening bottom. A break above the top line at 680 would mean a bottom is in, and give the index room to 850. A nice looking chart, but be on guard for a possible restest of that lower trendline.

The S&P 500 is back above its 1994 logarithmic trendline at 1369. If we close below that line by more than 2%, or 1335, we may have seen the end of the bull market. The index has repeatedly come close to a major technical breakdown over the last month or so, but has somehow escaped from the abyss each time. The bull is wobbly, but still standing.

The Dow broke out of a small downtrend yesterday and has continued to climb. First major resistance is 10,850, the old diamond apex, and critical res