RealTime IT News

Another Rally Fades

A promising rally faded in the last hour on Friday, as an earnings warning from Oracle was too much for buyers to overcome.

The ISDEX http://www.wsrn.com/apps/ISDEX/ lost 12 to 265, and the Nasdaq fell 65 to 2117. The S&P 500 declined 7 to 1234, while the Dow added 16 to 10,466. Volume rose to 1.29 billion shares on the NYSE, and 2.35 billion on the Nasdaq. Breadth was positive: advancers led 19 to 11 on the NYSE, and 18 to 17 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.

The Michigan consumer sentiment survey showed a slight uptick, the second straight day that economic indicators revealed a slight improvement.

Oracle fell 4 1/2 to 16 7/8 after warning that earnings will come in 2 cents light of estimates at 10 cents a share. The company said orders were just being postponed due to the economy. A host of software stocks were hit by analyst downgrades on the news, among them Vignette , off 7/16 to 5 15/16, Siebel , down 8 1/2 to 36 1/8, i2 , off 3 9/16 to 24, Commerce One , down 2 1/2 to 15 9/16, Ariba , off 2 1/2 to 14 1/2, Art Technology , down 4 3/16 to 24 1/8, and E.piphany , off 2 1/4 to 14 7/16.

Cisco was a weak sign for the Nasdaq, falling 2 3/8 to a new low of 22 1/8. Assuming the company can meet estimates for the next two quarters, it is trading at its lowest valuation since October 1998. Competitor Juniper Networks plunged 8 5/16 to 53 1/2 on rumors of an impending downgrade.

Ameritrade rose 11/16 to 8 15/16 on reports a top Merrill Lynch official may become the company's CEO.

Sapient fell 1 13/16 to 11 3/16 on an earnings warning.

Yahoo lost 2 3/4 to 21 11/16 on earnings concerns. Yahoo also adopted a shareholder right plan to fight hostile takeovers, but said there have been no efforts to take over the company. Salomon Smith Barney speculated that Yahoo could merge with eBay , which slipped 1/2 to 37.

Broadcom fell 2 to 46 on more lowered earnings estimates from analysts.

eBenX slipped 3/4 to 5 on news that its relationship with Verizon will end at the end of the year. eBenX said its financial outlook will not be affected.

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 indexes had a very nice turnaround going after forming higher lows at very critical supports, but then they gave back much of those gains. As we've been saying, 10,292 on the Dow, 1215 on the S&P and 2070 on the Nasdaq are make-or-break levels for the market. They will either be a bottom of some significance, or they will mark the beginning of a broader bear market. Two big negatives today: the S&P and the Nasdaq set new closing lows. But there were a number of positives, too: Breadth was positive, and the semiconductors, cyclicals and Transports all posted nice gains to the upside, all signs of early buying pressure. This is the third time in a week that the indexes have tried to reverse, a clear sign of support, but so far buyers have failed to come in at highe