Investors Shake Off More Negative Comments From Cisco

Technology and Internet stocks rose modestly on Monday despite the latest stealth warning from bellwether Cisco Systems.

The ISDEX http://www.wsrn.com/apps/ISDEX/ rose 8 to 434, and the Nasdaq climbed 21 to 2802. The S&P 500 added 5 to 1359, and the Dow tacked on 17 to 10,679. Volume declined to 400 million shares on the NYSE, and 800 million on the Nasdaq. Advancers led 17 to 10 on the NYSE, and 19 to 15 on the Nasdaq. The Federal Reserve meets tomorrow and Wednesday; traders are hoping for a 50-basis point rate cut. Fourth quarter GDP will be reported Wednesday. 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.

Cisco slipped after CEO John Chambers made more cautionary comments about the current "challenging" business environment, and analysts complied by shaving estimates. Broadcom slipped 3/4 to 109 1/4, and Juniper lost 1 9/16 to 117 3/16.

On the first day of all-decimal trading on the NYSE, Disney Internet fell 17 cents to 5.77, more than $2 off its intraday low, after the company announced its was shutting down its GO.com portal and merging with parent Walt Disney for 0.19353 DIS shares per DIG share.

Ariba slipped 2 1/4 to 37 3/4 on news that it will acquire Agile Software , up 7 3/16 to 50, for 1.35 ARBA shares per AGIL share.

Portal Software soared 3 to 13 5/8 after announcing a deal with AOL Time Warner . For more on Portal, click here: http://www.internetstockreport.com/column/article/0,1785,1661_572561,00.html.

Akamai rose 3 1/16 to 32 13/16 on news that it will run a back-up directory for Microsoft to protect against further hacker attacks.

Net2Phone tacked on 7/8 to 13 5/8 after announcing that it will become a voice ASP provider. SpeechWorks fell 3 7/16 to 34 5/16.

Amazon.com added 1 to 20 1/2 ahead of its earnings report tomorrow night.

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 pierced its broken September downtrend line on Friday (first chart), but has recovered nicely above that line. The index also looks like it's forming a bull flag (the gray lines), giving it upside potential to about 3300, one heck of a move from here. The S&P 100 is also holding comfortably above its downtrend line (second chart).

On the intraday charts, the Nasdaq is trading below broken support (the blue line), and could be forming a bear flag (the gray lines), with downside potential to 2500 to 2600. Oddly, the index could head that much lower and still form a bull flag in the daily chart; in short, it appears that the index has a short-term downside bias, but a longer-term strong upside bias. Before the Nasdaq turns up for good, we'd still like to see the index fill its gap at 2618.55 (the corresponding gap in the Nasdaq 100 is 2470.72), but so far sellers have