Bears Make A Comeback

The stock market resumed its losing ways on Wednesday, and an earnings warning from Sonus Networks after the close pressured networking stocks after hours.

The ISDEX fell 7 to 112, and the Nasdaq lost 37 to 1464. The S&P 500 declined 5 to 1007, and the Dow lost 92 to 8567. Volume declined to 1.5 billion shares on the NYSE, and 1.7 billion on the Nasdaq. Decliners led 16 to 15 on the NYSE, and 22 to 13 on the Nasdaq. For earnings reports, visit our earnings calendar at and reported earnings at For after hours quotes and news, visit our after hours trading site at

After the close, Sonus plunged more than 50% on an earnings warning, and Juniper traded under $10. The Nasdaq futures fell almost 2%.

During the day, Check Point dropped 2.31 to 21.71 after SoundView cut estimates.

Communications chip companies sold off on fears that they will miss their numbers this quarter. PMC Sierra fell 2.01 to 11.52, and Broadcom lost 2.25 to 22.75.

IBM dropped 3.15 to 91.30 after Merrill Lynch and Goldman Sachs cut estimates on the company.

Micron Technology plunged 3.99 to 17.25 after missing estimates by a wide margin.

Redback Networks declined .58 to 1.76 after warning. Extreme Networks fell 2.02 to 6.96 after ABN Amro cut estimates.

Nortel held up relatively well, losing 8 cents to 5.34 after Sanford Bernstein analyst Paul Sagawa upgraded the stock.

Comverse cratered 3.28 to 21.21 on a Salomon Smith Barney downgrade.

Exodus was halted ahead of an expected bankruptcy filing. [email protected] fell .10 to .17 on a Wall Street Journal report that it too may file for bankruptcy.

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:

This market is so weak it might not even hold up until the October 2-3 cycle turn. The Nasdaq (first chart) broke down out of what may be a bear flag today. A gap down tomorrow morning – currently implied by the Nasdaq futures – could create an “island reversal” by creating a gap opposite Monday’s gap up. 1458 is critical support. The Dow and S&P (second and third charts) are sitting right on the lower boundary of their bear flags; even a flat day tomorrow would likely break those patterns to the downside. Not much more to say than that; the Dow has minimum downside potential of 1,000 points based on that pattern, so be careful. The Dow and S&P must turn up tomorrow to even have a chance of another run back up to the top of those patterns.

Special report: For a free introduction to technical chart patterns and an overview of last year’s action in the stock market, visit,1785,2571_500051,00.html.

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