Bank stocks plunged Tuesday on Enron fears and worries about derivative problems at JP Morgan, and technology stocks were battered once again.
The ISDEX http://www.wsrn.com/apps/ISDEX/ fell 4 to 91, and the Nasdaq dropped 53 to 1229. The S&P 500 lost 22 to 797, and the Dow fell 82 to 7702. Volume rose to 2.44 billion shares on the NYSE, and 2.24 billion on the Nasdaq. Decliners swamped advancers 27 to 5 on the NYSE, and 27 to 8 on the Nasdaq.
After the close, Amazon and Expedia
topped estimates but traded lower. Openwave
and Applied Micro
matched estimates. Newport
, Websense
, Storage Tech
, Netscreen
, Advanced Fibre
, Ticketmaster
and NetIQ
topped estimates, and Corning
beat estimates but warned.
During the day, Hotels.com fell 5% despite beating estimates.
Microsoft fell to a new 52-week low. $40, the January 2001 low, may be next.
Texas Instruments , Silicon Labs
, JDA
and Triquint
rose on their earnings reports, but Altera
, Cirrus
, Novellus
and Computer Associates
fell on their reports.
Neoforma plunged 36% after announcing an accounting review.
Some technical comments on the market: Note: To see the charts in the text email newsletter, click on the internetstockreport.com story link at the top of the newsletter.
With the indexes oversold and just above major support (see first four charts below), a very high VIX reading (fifth chart), back-to-back -1500 TICK readings on the NYSE, and CNBC telling viewers that it may be time to look for shorts, we have to wonder if it isn’t time to begin to look the other way. A couple of bears on the cover of Time and Newsweek next week would just about do the trick. There are, however, some ingredients missing for a major bottom. To begin with, we haven’t had a string of 90% downside days yet, so that may have to wait for the next leg down. The NYSE has strung together a very rare four consecutive 80% downside days, but Paul Desmond of Lowry’s Reports says there is no correlation between such readings and major bottoms. Also, except for Friday, we have continued to get more equity call buyers than put buyers, showing that most traders are still trying to pick a bottom. And we haven’t gotten +DI readings under 10 on the Dow and S&P yet, although they are very close. The levels that we think should be good for a bounce are 1200 on the Nasdaq, 7380-7500 on the Dow, and 776-780 on the S&P. If those levels don’t hold, we’ll be on the phone to the Plunge Protection Team.
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