RealTime IT News

Buyers Return

A good earnings outlook from GE and strong long-term growth projections from Cisco lifted stocks on Tuesday, as buyers finally returned. A weaker than expected retail sales report raised rate cut hopes ahead of next week's Federal Reserve meeting.

The ISDEX http://www.wsrn.com/apps/ISDEX/ added 12 to 240, and the Nasdaq gained 91 to 2014. The S&P 500 climbed 17 to 1197, and the Dow rose 82 to 10,290. Volume rose to 1.36 billion shares on the NYSE, but declined slightly to 2.1 billion on the Nasdaq. Decliners led advancers 17 to 13 on the NYSE, but advancers led 20 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.

Cisco rose 2 9/16 to 21 3/8 after CEO John Chambers said that the current business environment remains difficult, but that the sector should see long-term 30-50% growth rates. Juniper , which also presented at the Merrill Lynch Global Communications conference, surged 9 3/4 to 59 7/16.

Cisco's comments that it plans to move into the security market appeared to have no effect on companies in that sector. Check Point rose 5 11/16 to 70 1/8, and Internet Security soared 7 5/16 to 44 5/8.

B2B stocks were strong. webMethods climbed 3 1/2 to 27 1/2 on a deal with Best Buy. Ariba added 1 9/16 to 12 7/8, i2 rose 2 3/4 to 21 5/8, and Commerce One tacked on .90 to 11.74. PurchasePro added 5/8 to 10 5/8 despite an announcement that founder and CEO Charles Johnson plans to begin selling shares.

Sonus Networks rose 4 1/16 to 26 on a multi-year deal with Qwest .

Engage added 1/32 to 1 after beating estimates by a nickel with a 21-cent loss.

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

Well, the market finally turned up today. A good start, but until the Dow gets back above 10,300, the S&P 500 above 1215, and the Nasdaq above 2070, the rally will be little more than a retest of recent breakdowns. As we said at midday, we had noticed that everyone on CNBC seemed to stop trying to call a bottom and started predicting lower lows. The most common levels cited have been 1500 and 1800 on the Nasdaq. When every market expert agrees on something, you can bet good money that they're wrong. That told us that either the market will bottom here, or it will go a lot lower than anyone expects. A cycle turn is due some time in the next week or so, so at least an intermediate bottom might not be a bad bet here.

The other fallacy we keep hearing is that we need a high-volume capitulation day for the bear market to end. The only major bear market that ended in a one-day reversal was a five-month panic in 1938-1939. This bear market will end when we least suspect it, for reasons we can't begin to fathom, but the odds are very high that it will not end on a high-volume panic sell-off. At some point, sellers will just plain run out of steam. We're seeing some evidence of that here. And finally, everyone thinks that the Dow's break of 10,300 was the start of Armageddon, or at least a retest of the 9650-9732 lows. That means that what will likely happen is