Blue chip stocks rose Wednesday on a better than expected Leading Economic Indicators reading and on hope for a Congressional agreement on an economic stimulus package, but tech stocks fell on profit worries.
The ISDEX http://www.wsrn.com/apps/ISDEX/ slipped 3 to 182, and the Nasdaq lost 21 to 1982. The S&P 500 rose 6 to 1149, and the Dow gained 72 to 10,070. Volume rose to 1.5 billion shares on the NYSE, and 1.9 billion on the Nasdaq. Decliners led 16 to 15 on the NYSE, and 20 to 15 on the Nasdaq.
After the close, Palm
and Riverstone Networks
topped estimates. JDS
announced it is buying IBM’s optical transceiver business.
During the day, Micron
fell after missing estimates, and Motorola
declined on earnings warnings.
rose after beating estimates, but Red Hat
declined after matching estimates, topped estimates.
slipped on reports that the company is offering 0% financing through the end of the quarter a month from now, raising fears that business is slower than expected.
surged on an investment from Qualcomm
fell on a convertible offering.
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A market of extremes today, with the Dow up but the SOX (first chart), the semiconductor index, getting crushed. That pattern in the SOX is an imperfect bearish evening star – a white day, doji star and a red day – which means the chips could have some more downside ahead. The Nasdaq (second chart), on the other hand, did not form an evening star and held its September uptrend line, a plus for tech stocks if that lower trendline can hold. Critical support is 1980 for tomorrow, meaning the index has virtually no downside room, and resistance can be found in the 1991-2011 range. The Dow (third chart) rose enough today to take a potential head-and-shoulders top out of play. 10,109, the 200-day moving average, is first resistance on the Dow, and then 10,200. 10,000 is first support. The S&P (fourth chart) has resistance at 1152-1155 and 1163-1170. Support is 1145 and then 1136-1137. One negative sign for the market is an excess of bullish sentiment – the VIX (fifth chart), the options volatility index, hit a lower low on a day that the indexes did not hit a higher high, creating a bearish divergence in sentiment.
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