Blue-Chips Gain On Late Rally

Blue-chips outpaced Internet and tech stocks Thursday for the second session in a row, thanks to another late-afternoon rally by the Dow Jones.

The Dow ecked out a tiny gain of 13.71, or 0.14%, finishing at 9799.06. The Dow rose more than 100 points in the last 45 minutes of trading. On Wednesday, the Dow also staged a late rally, which helped it to cut into
earlier heavy losses.

The Nasdaq lost 33.59, or 1.8%, to 1820.54, its lowest closing price since November 1998, while the S&P 500 dipped 8.22, or 0.7%, to 1145.07.

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Internet stocks took the brunt of Thursday’s losses, as’s Internet Stock Index tumbled 6.56, or 3.2%, to 199.31, and all 13 ‘Net sectors showed more decliners than advancers. For all sector breakdowns, visit WSRN’s Internet sectors page.

Data storage stocks were among the hardest-hit Thursday. JNI fell 17.4% to $17.53 after warning that lower sales tied to Sun Microsystems’ servers would result in a Q1 revenue shortfall.

EMC , the market leader among data-storage systems providers, plunged 11.0% to $29, while Network Appliance lost 12.1% to $16.31.

Customer relationship management software maker Blue Martini Software lowered Q1 revenue estimates and forecast a net loss of between 22 cents and 25 cents per share. Previous estimates called for a net loss of 9 cents per share. BLUE, trading near its all-time low of $2.19, slipped 2.3% to $2.56.

E-learning software provider DigitalThink gained 24.2% to close at $9.63 on no visible catalyst.

Let’s look at some technical analysis from Paul Shread…

March 29, 4 p.m.: The Nasdaq 100 once again found support at its lower
falling wedge boundary today at 1543 before rebounding (first chart, extra

wide for easier viewing). Declining at about 8 points per day, that line

should be at about 1535 tomorrow – and could correspond with a retest of the

recent 1794 low on the Nasdaq, which found support at 1802 today. Let’s hope

those levels hold. Note the two arrows on the chart too: twice the index has

broken out of that upper trendline, only to get blindsided by a Nortel

earnings warning both times. The Dow and S&P 500, meanwhile, continue to look

much stronger. Both indexes continue to find support from the bullish three

consecutive white candlesticks formed a few days ago (second and third

charts). The Dow’s low today, 9687, was the exact same level where that third

white candlestick began. The 9400-9500 level should be strong support on the

Dow, and important resistance is 9975. The S&P 500 found support today around

the second of three candlesticks at 1140. The 1120 level should also be

strong support, and key resistance is 1182.

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