Traders Ignore The Latest Cisco Warning

Traders shook off the latest stealth warning from bellwether Cisco Systems on Monday to send technology and Internet stocks higher.

The ISDEX http://www.wsrn.com/apps/ISDEX/ rose 17 to 443, and the Nasdaq climbed 57 to 2838. The S&P 500 added 9 to 1364, and the Dow tacked on 42 to 10,702. Volume declined to 1.03 billion shares on the NYSE, and 1.95 billion on the Nasdaq. Advancers led 19 to 11 on the NYSE, and 23 to 15 on the Nasdaq. The Federal Reserve meets tomorrow and Wednesday; traders are hoping for a 50-basis point rate cut. Consumer confidence will be reported tomorrow, and 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.

After the bell, InfoSpace rose 1 to 7 after topping estimates by 3 cents with 4-cent earnings.

During the day, Cisco slipped 1 1/4 to 37 1/4 after CEO John Chambers made more cautionary comments about the current "challenging" business environment, and analysts complied by shaving estimates. Cisco reports earnings Tuesday, Feb. 6. Broadcom slipped 1/8 to 109 7/8, and Juniper lost 2 11/16 to 116 1/16.

On the first day of all-decimal trading on the NYSE, Disney Internet fell 7 cents to 5.86, 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 1 5/8 to 38 3/8 on news that it will acquire Agile Software , up 7 9/16 to 50 3/8, for 1.35 ARBA shares per AGIL share.

Portal Software surged 2 7/16 to 13 1/16 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 2 1/16 to 31 13/16 on news that it will run a back-up directory for Microsoft to protect against further hacker attacks.

Net2Phone tacked on 1 3/8 to 14 1/8 after announcing that it will become a voice ASP provider. SpeechWorks fell 4 1/2 to 33 1/4.

Amazon.com added 5/8 to 20 1/8 ahead of its earnings report tomorrow night. Nokia reports tomorrow morning amidst a tough environment for wireless companies; the stuck is sitting right on support at 36.

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 lin