After more than a week of extreme volatility, stocks had a quiet day on Tuesday.
The ISDEX http://www.wsrn.com/apps/ISDEX/ slipped 1 to 119, and the Nasdaq added 2 to 1501. The S&P 500 rose 8 to 1012, and the Dow climbed 56 to 8659. Volume declined to 1.6 billion shares on the NYSE, but climbed to 2.16 billion on the Nasdaq. Advancers led 18 to 12 on the NYSE, but breadth was even 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.
After the close, Micron Technology reported revenues of $480 million, way below estimates of $751 million, and the company’s loss of 76 cents was much worse than estimates for a 34 cent loss. Redback Networks
warned.
During the day, investors viewed a big plunge in consumer confidence as better than expected news, because most of the drop occurred before the September 11 terrorist attacks, raising hope that the effect of the attacks on consumer confidence might not be as bad as feared. But a separate report said home sales have plunged since the attacks. Administration and congressional officials discussed a $100 billion stimulus package.
Homestore dropped 1.65 to 7.79 on news of slowing home sales.
Rumors that IBM might warn did little to faze investors.
Exodus plunged .32 to .18 on a Wall Street Journal report that the company could file for bankruptcy as early as this week.
But stocks trading lower than $1 got some good news on reports that the Nasdaq may waive its $1 listing rule for a year. That could help struggling firms like Excite@Home , off .05 to .28, which announced a restructuring today.
AOL Time Warner rose .30 to 32.80 despite issuing an earnings warning. Real Networks
climbed .20 to 4.22 on news of a stock buyback.
Time Warner Telecom plunged 6.65 to 8.81 on a revenue warning.
VeriSign continued to gain on positive analyst comments.
Some technical comments on the market: Note: We include 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 Dow and S&P 500 (see first two charts below) continue to form bear flags, implying that there could be another leg down for this market when this rally is over, and the Nasdaq (third chart) may also be forming one. Based on those charts, resistance should be found at 8800-8850 on the Dow tomorrow, and critical support at about 8450. The S&P should face resistance at 1030-1035, with support at 995-1000. The Nasdaq must hold 1490-1500, and resistance should be found at about 1575. But now for the tricky part: how low can the market go? That depends entirely on where the recent leg down in the market began. On the Dow, there are three possibilities (see fourth chart below). Depending on where you measure from, the Dow could have downside potential of 1,000, 1,600 or 2,000 points from wherever that pattern breaks. For more detailed information on our current market outlook, please see today’s Morning Report.
Special report: For a free introduction to technical chart patterns and an overview of last year’s action in the stock market, visit http://www.internetstockreport.com/guest/article/0,1785,2571_500051,00.html.
