Amazon.com beat estimates after the bell Tuesday and traded 10% higher. But Nortel Networks missed its revenue number, sending optical networking stocks sharply lower.
Blue chip stocks rose during the day, but technology and Internet shares lost ground. The ISDEX lost 17 to 651, and the Nasdaq dropped 48 to 3419. The S&P 500 climbed 2 to 1398, and the Dow surged 121 to 10,393. Volume rose to 1.15 billion shares on the NYSE and 1.85 billion on the Nasdaq. Advancers led by 15 to 12 on the NYSE, but decliners led 21 to 18 on the Nasdaq. The big economic reports for the week are Thursday’s employment cost index and Friday’s GDP report. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our after hours trading site.
Amazon.com rose 3 points after hours after closing at 29 9/16. The company beat estimates by 7 cents with a 25-cent loss, and revenues of $638 million trounced estimates of $600-$608 million. AskJeeves
also beat estimates, but announced the resignation of CFO Thomas Low. VerticalNet
also beat estimates after the bell.
But Nortel’s earnings report could test the market on Wednesday. The stock plummeted 12 points after hours to 51 after revenues came in at $7.3 billion, $300 million less than expected, and the company forecast slower optical networking growth in 2001. The optical networking segment has led the market since May, and Nortel has been at the forefront of that sector.
During Tuesday’s regular session, MarchFirst imploded 6 15/16 to 4 7/8 after missing estimates by 19 cents with 1-cent earnings. Scient
lost 4 3/16 to 18 as Internet consultants’ woes continued.
DoubleClick rose 1 1/16 to 14 3/16 after announcing a long-term agreement with NBC Internet
.
FreeMarkets rose 5 1/2 to 55 7/16 on better-than-expected earnings. About.com
slipped 9/32 to 24 17/32 after beating estimates by 5 cents with an 18-cent loss. Extended Systems
lost 4 15/32 to 35 17/32 after the company’s 15-cent loss beat estimates by 3 cents.
Ashford.com slipped 1/16 to 2 3/8 after beating estimates by 8 cents with a 19-cent loss. The company also raised forward guidance and predicted profitability by the end of 2001. Ameritrade
, off 3/4 to 14 3/4, beat estimates by 3 cents with a breakeven quarter. ServiceWare.com
, off 1/8 to 5 3/8, beat estimates by a penny with an 11-cent loss.
Globespan , up 1 1/4 to 91 1/2, and Metromedia Fiber
, up 1 3/4 to 19 1/16, led active trading in DSL stocks after beating estimates handily. Covad
slipped 3/8 to 6 11/16, but Rhythms
rose 3/8 to 3 13/16 and also beat earnings estimates after the close.
Cobalt slipped 3/8 to 2 5/8 after beating estimates by 9 cents with a 35-cent loss.
Broadcom gave back 13 3/4 to 238 after trading as high as 261 3/16 on news that it will be added to the Nasdaq 100
Monday. Ariba
, which will join the index on Friday, slipped 5 to 127 1/2.
Blue Martini tacked on 2 31/32 to 41 23/32 on a multi-year alliance with Hewlett-Packard
.
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The Nortel revenue miss should be taken seriously; the stock has been a real leader in the one sector that has been relatively immune to selling. We’ll watch how well the market absorbs the news tomorrow.
What a disappointing finish. What started out as a potential follow-through day (a 1%+ gain on volume that is higher than the day before), turned into a sell-off on rising volume. Not something we want to see this early in the rally. The Nasdaq continues to struggle with its 38% retracement level of 3494 and the August bottom of 3521. The index may also be struggling with its October 1998 trendline here. To the downside, we want to stay above the Nasdaq’s September downtrend line at about 3300.
The S&P 500 cannot close below its 1994 logarithmic trendline at about 1350 by more than 2%, or 1323. 1380 could provide some support on the S&P. The S&P broke through its secondary downtrend line at about 1405 this morning, but then closed back below it. 1420-1425 could also pose some resistance.
The ISDEX continues to run into resistance at the 700 level. Next resistance is 725-750, and first support is 650, where we closed today. The Dow is back above 10,300 resistance, but turned back at its secondary downtrend line just above 10,400.
