RealTime IT News

Rocky Day Ends Down

In the first full session of trading after the Federal Reserve's half-point rate cut, tech and Internet stocks went on a rocky ride Wednesday before finishing the day down.

The ISDEX fell 6.5, or 3.1%, to 204, while the Nasdaq tumbled 28, or 1.5%, to 1830. The S&P 500 lost 21 to end at 1122, and the Dow plummeted 234 to 9487, nearly equaling Tuesday's 238-point loss. For earnings reports, visit our earnings calendar and reported earnings site. For after hours quotes and news, visit our after hours trading page.

With the sole exception of the Internet Consultants/Designers sector, which saw a 9-9 split, every 'Net group had far more losers than gainers. Among the hardest-hit 'Net sectors were Wireless (one break-even and 19 decliners), Search/Portals (one up, 11 down) and Financial Services (one gainer, 10 losers). All Internet sector breakdowns can be found here.

Let's look at the big movers.

XML-based Web portal software maker Sequoia Software jumped 10.6% to $5.53 in heavy trading on news that it is being purchased by Citrix Systems for $184.6 million, which works out to $5.64 per share.

Citrix, a provider of application server software and services, fell 10.8% to $17.69 as investors reacted negatively to the company's estimate that the deal will hurt this year's profits by 5 to 7 cents per share. Citrix said the transaction should be completed in the second quarter.

Bottomline Technologies , a seller of Web-based billing and payment systems, rose 11.9% to $6.47 after announcing that CVS, the nation's largest drugstore chain, has selected the company's PayBase software platform for its electronic processing architecture.

Online technology and commerce information provider CNET Networks got a boost from an expanded content distribution agreement with Consumer Reports. CNET shares climbed 5.9% to $8.94.

On the downside, two wireless companies were hammered Wednesday as nagging doubts about short-term consumer demand continued to dog the sector. Wireless Facilities lost 19.7% to close at $6.13, while InfoSpace fell 17.4% to $2.22.

Internet-based learning systems developer Saba Software lost 22.4% to close at $6.06, despite landing a contract with Telenor, Norway's top telecommunications provider.

And now for you technical analysis fans, here's something from Paul Shread, our regular Market Close writer...

The S&P 500 broke our critical support level of 1125 today, a worrisome sign for the market as a whole (first chart). The index needs to recover 1125-1130 quickly, or it could be headed for 1000, the October 1998 lows. 1060 or so is a possible support, but it is not nearly as big a support as the 1000 or 1125 levels. The Dow broke 9650 support today, and became the last of the major indexes to take out its previous year's low, the first time since 1982 that the major indexes have done that. The Dow's next support is in the 9150-9350 range (second chart). But the Nasdaq 100 continues to hold up well and may be forming a bullish falling wedge (third chart), aided by strength in semiconductors and leading names like Cisco and Juniper. Tomorrow is the last day for a possible cycle turn in the market, so the indexes need to reverse tomorrow.