Bulls Let One Slip Away

Earnings jitters were in evidence on Monday, as the major indexes all fell after starting out the day on the plus side.

The ISDEX lost 11 to 793 after trading up 2%. The Nasdaq fell 62 to 3741, closing at the lows of the day after trading up more than 60 points early on. The S&P 500 fell 9 to 1439, and the Dow slipped 39 to 10,808. Volume declined to 980 million shares on the NYSE and 1.7 billion on the Nasdaq. Decliners led 15 to 12 on the NYSE and 22 to 17 on the Nasdaq. An Iraqi claim that the country had shot down a U.S. or British warplane was debunked by the U.S. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our new after hours trading site.

Palm , up 7/16 to 52 1/4 during the day, slipped slightly after hours after reporting earnings of 4 cents a share, 2 cents better than analysts expected. The stock rose during the day on news that the company is working with Motorola to develop a wireless “smart phone” that would combine wireless Internet, phone and personal organizer capabilities.

During the day, bellwether Cisco Systems lost 3 1/8 to 57 3/16, taking out 60 and 58 support. The stock rallied above 58 after hours on better-than-expected earnings from Cabletron .

Most B2B leaders finished down on the day, but Commerce One gained 4 1/8 to 79 7/8 on a Banc of America Strong Buy rating.

NBC Internet soared 1 5/16 to 7 1/2 after unveiling a new strategy based on customized versions of the new NBCi.com portal to be distributed via new free Internet access services launched by retailers and traditional publishers, among others. Goldman Sachs made bullish comments on the company.

@Plan rose 1 1/2 to 8 3/4 after announcing that it will be acquired by DoubleClick , off 1 1/2 to 36, for about $9.25 a share.

net.Genesis soared 2 7/16 to 8 1/8 on a Chase H&Q Strong Buy and $22 price target.

Stamps.com fell 1 1/2 to 4 on a Goldman Sachs downgrade to Outperform from Trading Buy. Goldman expects the company’s revenues to disappoint.

WebMD gained 1/4 to 12 3/8 after Merrill Lynch initiated coverage with a near-term Neutral, long-term Buy rating.

Broadcom added 3 1/2 to 252 1/4, but off its intraday high of 261 3/16, on a Banc of America Strong Buy rating and $400 price target.

BroadVision slipped 17/32 to 30 25/32 after trading as high as 32 3/4 on news of an alliance with Compaq .

Ciena gained 6 5/16 to a new high of 127 1/16, but off its intraday high of 136 1/4, on a sizeable deal with Korea Telecom .

Copper Mountain rose 1 5/16 to 47 1/2 on a Kaufman Brothers Strong Buy rating.

Ventro fell 2 7/16 to 11, down from a high of 15, as investors tried to make sense of a report that the B2B company has hired M&A company Broadview to find a merger partner.

Some technical comments on the market: Note: We will now be including charts with the technical market commentary; click on the link in the story below.

Not an encouraging start to the Nasdaq’s rally. The index turned back around the 38% retracement level (3859) of the 4259-3614 decline. That’s not a good sign, given that the index turned back last week at the 38% retracement level of the 4259-3702 decline at 3913. But the more troubling aspect of the Nasdaq’s action today is that it turned around right at its

old broken uptrend line from May, action that serves to reinforce the broken uptrend. A move above 3913 would both give the Nasdaq a higher high and place the index back above the broken trendline. To the downside, 3700, the old October 1998 trendline, is the first strong support. Critical support is the August bottom of 3521.

The S&P 500 turned back just below 1460 resistance and remains below its October 1998 trendline. A move above 1460 would be the first sign the index has room to run. To the downside, we’re going to raise the critical support level on the S&P 500 to 1420, where it turned back last week. The would be on a line with the March (1340) and April (1361) bottoms. The Dow briefly got back above the upper boundary of its old bearish diamond pattern around 10,825, but the index turned back to close just beneath that line. If the Dow can clear 10,900, the old economy stocks have room to run. Critical support is 10,500, the October 1998 trendline. The ISDEX is back in the 787-800 support range. Next strong support is the 750-760 area, and critical support is the May uptrend line at about 725. The ISDEX turned back today at 822; two recent rallies have peaked around the 50% retracement level at 850.

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