Blue Chips Lead Market Higher

Investors on Thursday continued to show preference for the safety of blue chips, but the Nasdaq managed to end its seven-day, 23% losing streak.

Rumors of an intermeeting rate cut by the Federal Reserve buoyed stocks, but release of the minutes of the November meeting showing that the Fed voted 10-0 last month to maintain its tightening bias took some of the wind out of the rumors.

The ISDEX fell 7 to 328, but the Nasdaq climbed 7 to 2340. The S&P 500 added 10 to 1274, and the Dow gained 168 to 10,487. Volume declined slightly to a still-healthy 1.41 billion shares on the NYSE and 2.69 billion on the Nasdaq. Advancers led by 16 to 12 on the NYSE, but decliners led 22 to 18 on the Nasdaq. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our after hours trading site.

NetCreations soared 2 5/16 to 6 11/16 after announcing that it had received a $7 takeover offer, twice what it would receive under a deal with DoubleClick , off 13/16 to 9 3/16.

Liberate , up 2 to 13, led the ISDEX higher after blowing out earnings estimates and raising forward guidance.

B2B stocks were back in favor, led by i2 , which surged 6 to 43. Ariba rose 5/8 to 47 7/8, finishing below its previous 49 support.

Cisco Systems led infrastructure stocks higher, climbing 2 1/2 to 39.

eBay recovered 11/16 to 28 5/8, but well off its high of 32 15/16. Yahoo fell 2 1/16 to 25 7/8, almost 90% off its all-time high of 250, and Amazon.com lost 1 1/2 to 15 3/16.

PDA stocks were weak despite better-than-expected earnings from Palm , off 12 1/4 to 25 7/8, and Research In Motion , down 9 1/4 to 65 3/4. There were concerns about Palm’s revenues and margins. Handspring fell 10 1/8 to 34.

RealNetworks plunged 4 3/8 to 5 9/16 on an earnings warning. Akamai lost 2 1/2 to 21 7/16, and Digital Island slipped 17/32 to 3 1/16.

TheStreet.com rose 13/16 to 2 1/2 after approving a $10 million share buyback program.

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The Nasdaq is holding its 1990 logarithmic trendline around 2300 so far. A very important line, and one we’ve never ended a month below. Given that the next week or so is historically the most positive of the year, it’s a good bet that we won’t close the year below that line. A retest in January is not out of the question, however. The Nasdaq also found support on a line with the early 1999 lows; a pretty potent combination between the two. The index formed a doji today, trading higher, lower and ending around the unchanged level, indecision that often marks a turning point. Filling a gap between 2433 and 2512, and then closing above 2523 (the low of early December), would make the Nasdaq look pretty good. The ISDEX faces resistance at 360, 380 and 400; back above 400 and that index also begins to look pretty good.

The S&P 100 and S&P 500 found support at a pretty strong level, 650 and 1250, the Octob

er 1999 lows. A close back above 685 and 1300, respectively, would be pretty positive developments.

The Dow continues to be the best-looking index. It held critical 10,300 support, and is forming a 600-point rectangle between 10,300 and 10,900. A clean break of either level will likely lead to a 600-point move in the direction of the break.

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