Stocks Post Modest Gains

Internet security stocks fell on an earnings warning from Network Associates on Wednesday. The broader market posted modest gains in light trading.

The ISDEX http://www.wsrn.com/apps/ISDEX/ rose 4 to 374, and the Nasdaq climbed 27 to 2520. The S&P 500 added 12 to 1327, and the Dow gained 71 to 10,763. Volume rose to 382 million shares on the NYSE and 765 million on the Nasdaq. Advancers led by 16 to 10 on the NYSE, but decliners led 19 to 16 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.

Network Associates plummeted 7 7/8 to 3 7/8 after warning of a fourth-quarter loss instead of an expected profit. Security stocks fell in sympathy, led by Symantec , off 2 11/16 to 29 7/16, Checkpoint , down 4 11/16 to 136, and Internet Security , down 2 9/16 to 76 1/4.

B2B stocks were strong after SG Cowen made positive comments on the sector in general and Commerce One , up 2 7/16 to 24 19/32, in particular. The firm said the B2B sector should continue to experience strong growth in a slowing economy, and most companies should begin producing positive earnings. Ariba rose 3 5/16 to 55 5/8, and i2 gained 2 7/16 to 53 3/8.

Lehman Brothers made positive comments on Akamai , up 1 1/16 to 24 7/8, Digex , up 3/16 to 24, and Exodus , off 1 9/16 to 20 1/16.

E-commerce giants Amazon.com , eBay and Yahoo were the source of speculation from SG Cowen, which said that Amazon could announce a partnership with Wal-Mart, and that eBay and Yahoo could merge. eBay is reportedly launching its first national television campaign.

RadView Software fell 19/32 to 2 1/2 on an earnings warning.

Quepasa.com , halted at 1/8, announced that it plans to liquidate and return the proceeds to shareholders.

Juniper , up 7 7/16 to 124 1/2, JDS Uniphase , up 2 3/4 to 44 5/8, and Sycamore , up 2 1/8 to 39 7/8, led Internet infrastructure stocks higher.

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 is just under its early December low of 2523; a close above that level would be a positive for the index. Similarly, the ISDEX is also struggling at its early December low of 384. A bunch of mixed signals the last few days: The Nasdaq 100 is so far forming a pretty nice up trend channel (see chart below), but that chart could also be a bear flag, signaling the possibility of lower lows ahead. Also, the indexes all left gaps on Friday's big up day that may need to be filled at some point, at 2224 and 2340 on the Nasdaq 100 and the Nasdaq, 1275 and 668 on the S&P 500 and 100, and 328 on the ISDEX. However, fear and bearishness is on the rise, both positives. The CBOE's put/call ratio spiked up to 1.22 this morning, the highest reading since October, before pulling back. A healthy level of fear is necessary to put in a bottom. Barring a major earnings warning the next couple of days, we expect a positive bias into next Tuesday, with a retest of the lows some time