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Stocks Cheer Election News

Stocks rallied Monday after Texas Gov. George W. Bush was declared the winner in the contested Florida presidential vote, but more court challenges loomed. Technology and Internet stocks pulled back from strong early gains on weakness in chip stocks.

The ISDEX slipped 8 to 451, 30 points off its high, and the Nasdaq climbed 13 to 2917, turning back at 2998. The S&P 500 gained 13 to 1355, and the Dow added 103 to 10,574. Volume rose over Friday's light trading, to 405 million shares on the NYSE and 833 million shares on the Nasdaq, but declined over last Wednesday's trading levels. Advancers led by 15 to 10 on the NYSE and 19 to 16 on the Nasdaq. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our after hours trading site.

E-tailers fell victim to profit-taking despite the start of the holiday shopping season. eToys added 3/16 to 2, but down from an intraday high of 2 1/2. Amazon.com lost 1 3/8 to 27 9/16, well off its high of 30 3/4. A Commerce Department report said that online shopping rose more than 15% sequentially in the third quarter.

Yahoo , up 7/16 to 41 5/16, reported that transaction volume on Friday more than doubled over year-ago levels.

Chip stocks were weak, led by weakness in Micron Technology , off 2 1/4 to 38 5/8, and Broadcom . Salomon Smith Barney lowered its price target on Broadcom based on flattening orders and inventory concerns, but said problems will be short-lived.

B2B stocks struggle on Wit SoundView downgrades to Commerce One , off 2 5/8 to 36 5/8, and Ariba , down 7 15/16 to 70 1/2. Even at these prices, Wit said the stocks do not reflect the limited opportunity for simple procurement and marketplace applications. The firm cuts it price target for Ariba to $52 and for Commerce One to $39. Investors ignored news of a Korean venture that will be powered by Commerce One. Technical note: Ariba continues to struggle around its previous breakout point of 83 1/2, with downside potential to $49.

Vignette added 1/4 to 21 1/16 on a Dain Rauscher Wessels Strong Buy Aggressive rating and $100 price target.

XO Communications rose 13/16 to 17 3/4 on a positive mention in Barron's.

E-Stamps climbed 21 cents to 1/2 after announcing it will exit the Internet postage business and cut employees by 30%. The company will focus on Web-based shipping and logistics.

Blue Martini rose 15/16 to 21 7/8 on a Thomas Weisel Strong Buy rating and $100 price target, saying the company's fundamentals remain strong.

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 broke out of its falling wedge today (first chart), a sign that sellers could be running out of steam. However, advances out of falling wedges tend to be slow ones, and it's been a pretty unreliable pattern in recent months, often just a breather before further selling. Also, the Philadelphia Semiconductor Index (not pictured) is forming a large descending triangle, with downside potential all the way to 400; not a pretty picture. We'll find a chart of the pattern for the close. However, it is a plus that the Nasdaq quickly recovered above the large trendline marking the start of its top two years ago (second chart).