Blue Chips Lead Market Lower

Blue chip stocks led the market sharply lower Tuesday on negative testimony from Fed Chairman Alan Greenspan. Amazon plunged on a revenue warning and profitability concerns, and Lucent announced massive job cuts.

The ISDEX fell 5 to 194, and the Nasdaq lost 29 to 1959. The S&P 500 dropped 19 to 1171, and the Dow fell 183 to 10,241. Volume rose to 1.2 billion shares on the NYSE, and 1.59 billion on the Nasdaq. Decliners led 21 to 9 on the NYSE, and 24 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, QLogic dropped after missing revenue estimates, taking other storage stocks down after hours. PeopleSoft , Ticketmaster and Digital River rose after topping estimates.

During the day, plunged 3.78 to 12.25 after topping estimates by 6 cents with a 16-cent pro forma loss, but revenues came in light, and the company guided forward revenue estimates 10%-15% lower. The company is sticking to its target of pro forma profitability by the fourth quarter, and it also announced an investment of $100 million from AOL .

Lucent plunged 1.48 to 6.42 after missing estimates and announced 15,000-20,000 more job cuts.

Openwave surged 4.20 to 23.50 after topping estimates by a penny with 11-cent earnings and maintaining its full-year outlook of 43 cents a share. Texas Instruments , off .60 to 30.20, warned. Altera , off .76 to 28, and Onis , down .43 to 22.11, matched estimates.

[email protected] lost .54 to 1.62 on cash concerns and a weak outlook.

Qualcomm lost 2.80 to 58.05 on the resignation of COO Richard Sulpizio. The company reports earnings tomorrow night.

Cisco , up .29 to 18.56, continued to rise on speculation that the company will meet estimates when it reports August 7.

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:

Tomorrow is an important day for the market: another strong down day on the Dow and S&P, closing near the lows, would be a big negative. The good news is the market is oversold enough to produce a short-term bounce in the next couple of days, just in time for the usual end-of-month rally. The Philadelphia Semiconductor Index, which tends to lead the market, looks a little weak here, so that’s one concern. The Nasdaq (first chart) held its recent intraday low of 1934, but produced a new closing low. Is it a successful retest of the recent lows? Frankly, we’d be happier if it went a little lower for a couple of reasons. A strong bounce off 1900-1920 (the lower black trendline; a possible bullish falling wedge) would be a plus, and set up a possible bullish scenario, but a break of that line would be a big negative. To the upside, 1972 and 2000 are first resistance levels. The S&P 500 (second chart) set a lower low on both an intraday and closing basis, a negative. Another 15-20 point down day tomorrow could mean lights out for the broad market. The S&P could find support at 1155; below that, a retest of the 1080 lows seems likely. 1180-1187 is first resistance, and then 1200. But the S&P’s technical underperformance here is a little troubling. The Dow (third chart) must hold the 10,120-10,226 area, or it is likely headed for a bout with critical support at 9950. So far, the index has produced both a higher intraday and closing low, a plus. A move above 10,430-10,475 would be a plus.

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