RealTime IT News

More New Lows For Nets, Techs

Internet and technology stocks continued to set new lows on Tuesday, as yet another 1-2 day rally failed.

The ISDEX fell 36 to 408, and the Nasdaq lost 145 to 2734, both new 52-week lows. The S&P 500 dropped 12 to 1336, and the Dow declined 38 to 10,507. Volume rose to 1.02 billion shares and 1.9 billion on the Nasdaq. Decliners led by 16 to 11 on the NYSE and 29 to 10 on the Nasdaq. Durable orders and consumer confidence both fell, raising fears of an economic slowdown and hopes for a neutral Fed. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our after hours trading site.

Communications chip companies were dumped after Lehman Brothers analyst Dan Niles made negative comments on PMC-Sierra , down 5 13/16 to 96 7/8. Broadcom dropped 12 15/16 to 84 5/8, and Vitesse lost 4 to 52 7/8. Banc of America made positive comments on the group, saying the sell-off on inventory concerns has been overdone.

Palm plummeted 6 1/4 to 37 1/4 on cautionary comments from Wit SoundView, which said limited supply of Palms in stores could limit upside for the quarter.

Amazon.com lost 2 15/16 to 25 1/16 after Banc of America said it expects the company's growth rate to slow next year. Yahoo fell 3 1/4 to 36 7/8, a new 52-week low.

Brocade plummeted 28 to 161 ahead of its earnings report tomorrow night.

Merrill Lynch said it expects equipment spending to remain strong in 2001 for optical systems, next-generation switching and wireless infrastructure, but infrastructure stocks got only a brief bounce on the news. Juniper fell 17 1/8 to 106 5/8, 24 points off its high. Ciena dropped 13 1/8 to 84 1/4 on negative analyst comments, and Corvis lost 2 7/16 to 22 9/16.

BroadVision plunged 6 5/16 to 24 on a Royal Philips Electronics contract win by competitor Art Technology , down 5 9/16 to 34 1/8.

Covad slipped 1/2 to 2 7/32 after announcing 13% layoffs.

B2B stocks struggled yet again. Commerce One lost 4 3/8 to 31 5/8, just above 29 support, and Ariba fell 5 3/16 to 61 13/16. Ariba's next support is 60, where the selling stopped today, but the stock has downside potential to 49.

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 Philadelphia Semiconductor Index had a major breakdown today, closing below the lower boundary (600) of a 200-point descending triangle by more than the required 2% (577). The descending triangle has been an unerringly accurate chart pattern in this sell-off, predicting huge declines in stocks like Priceline.com and Inktomi. This one gives the semis downside potential all the way to 400; not a pretty picture, and one that would likely take the Nasdaq to significantly lower lows, perhaps all the way to the 1990 logarithmic trendline at about 2350, if not lower. The SOX is likely to retrace to 600-620 before putting in further downside. A close above 620 would negate the breakdown.

The Nasdaq took out its recent low of 2755 after failing again at 2800-2850 support. Both the Nasdaq and Nasdaq 100 negated falling wedge breakouts yesterday (first chart), a negative sign. Hopefully