Blue Chips Weak Again

Continued weakness in GE and an earnings miss by Citigroup pressured blue chips on Monday. Techs got a boost after the close when Texas Instruments and Novellus topped estimates.

The ISDEX gained 1 to 144, and the Nasdaq slipped 2 to 1753. The S&P 500 lost 8 to 1102, and the Dow fell 97 to 10,093. Volume declined to 1.12 billion shares on the NYSE, and 1.32 billion on the Nasdaq. Decliners led 17 to 14 on the NYSE, and 16 to 13 on the Nasdaq.

After the close, Texas Instruments and Novellus beat estimates and raised guidance. Unisys also topped estimates, but Handspring missed.

During the day, AOL Time Warner rose 6% on Bernstein comments that the company is undervalued relative to other media stocks, and that the online business is essentially valued at zero at current prices. There was speculation that AOL may spin off the online unit.

Paypal surged 8% to a new high. The company reports Wednesday.

Intel slipped 1% ahead of its earnings tomorrow night.

Priceline surged 10% on an upgrade.

BEA rose 5% on a Prudential upgrade.

Adtran rose 9% after topping estimates.

i2 slipped 6% on the resignation of CEO Greg Brady. Founder Sanjiv Sidhu will take over.

Some technical comments on the market: Note: To see the charts in the text email newsletter, click on the story link at the top of the newsletter.

Any further downside for this market and the S&P 100 (see first chart below) would have a major breakdown. 546 is critical support on that chart. To the upside, a break of about 1123 on the S&P 500 would be a clear breakout for the market (see second chart below). For the Nasdaq (third chart) a break above 1770-1780 would look pretty good, and 1740 is important support. On the Dow (fourth chart), 10,210 and 10,310 are the levels to beat, and 9950 looks like strong support. It is a different market the last couple of days, with techs outperforming and blue chips lagging.




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