Fed Cuts Rates Half A Point
Stocks reacted with initial disappointment after the Federal Reserve cut rates by a 50 basis points on Tuesday.
The ISDEX http://www.wsrn.com/apps/ISDEX/
The wireless Web figured prominently in Tuesday's trading. Yahoo
Lehman Brothers cut price targets but maintained Strong Buy ratings on Palm
GoAmerica
Net2Phone
Most leading stock were mixed ahead of the Fed news. Juniper
Ariba
Check Point
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
Given that the market may have been expecting a 75 basis point rate cut, 50 basis points could lead to some disappointment and possibly a retest of the recent lows, but we'll give the market a while to figure out what it wants to do. But this is the most aggressive Fed rate-cutting in 19 years, and should be bullish for stocks in the longer term. The Nasdaq has a nice lower trendline at 1857 today (1847 tomorrow), the lower boundary of what could be a bullish falling wedge (first chart). The Nasdaq 100 also has a clear lower wedge trendline forming (second chart). Sellers seem to be running out of steam lately, and the chart patterns and price action have so far supported that view. The Nasdaq is also holding above pretty stubborn resistance from mid-1998 in the 1850-1870 range (third chart), so that could add to support in this range. The next support level below 1850 would likely be 1750-1770. Also adding to the trend exhaustion case is that the Nasdaq 100 hasn't had the kind of rapid descent that would be expected after it broke a bear flag last week (fourth chart), but we'll wait another day before disregarding that pattern. A break above 1800 by the Nasdaq 100 in the next day or so would negate that pattern. The Nasdaq needs to clear 2028, the July 1998 high, fill a down gap at 2042-2053 to confirm the trend exhaustion, and get back above 2070, the redrawn 1990 logarithmic trendline. After that, the upper boundary of that falling wedge is just under 2100. We are still expecting a significant turn in the market this week, but we may need to retest the lows first.
was unchanged at 224, and the Nasdaq slipped 13 to 1939. The S&P 500 lost 1 to 1169, and the Dow declined 23 to 9936. Volume declined to 470 million shares on the NYSE, and 712 million on the Nasdaq. Advancers led 18 to 10 on the NYSE, and 18 to 13 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.
rose 5/16 on a content deal with Verizon Wireless.
, up 1 7/16 to 15 3/4, and Handspring
, up 3/8 to 17 15/16. Lehman said Palm may be seeing a slowdown this month, but that handspring appears to be on track.
rose 13/32 to 3 17/32 on an alliance with Research In Motion
, which slipped .68 to 28.82 despite a deal with Lucent
.
rose 1/4 to 8 15/16 on better than expected numbers. EXFO
, up 2 7/8 to 26 1/8, beat estimates by 4 cents with 14-cent earnings.
slipped 5/8 to 57 13/16, and Cisco
tacked on 3/4 to 21 9/16.
rose 5/8 to 12, i2
slipped 5/8 to 17 3/4, Commerce One
climbed .33 to 10.75, and PurchasePro
slipped 7/32 to 8 1/2.
finally bounced, rising 2 to 58 7/16. Openwave
founds support at 25.20 and rose .81 to 28.31.