Bulls Run Out Of Steam

Stocks ended the day mixed on Thursday, as the indexes spent the day range-bound in high volume.

The ISDEX http://www.wsrn.com/apps/ISDEX/ rose 3 to 127, and the Nasdaq climbed 16 to 1597. The S&P 500 slipped 2 to 1069, and the Dow lost 62 to 9060. Volume declined to 1.58 billion shares on the NYSE, and 2.55 billion on the Nasdaq. Advancers led 17 to 13 on the NYSE, and 20 to 15 on the Nasdaq. For earnings reports, visit our earnings calendar at http://www.wsrn.com/apps/earnings/internet.xpl and reported earnings at http://www.wsrn.com/apps/earnings/ireported.xpl. For after hours quotes and news, visit our after hours trading site at http://www.afterhourstrading.com.

After the close, McData and Micromuse rose on better-than-expected warnings.

During the day, traders ignored a huge jump in unemployment claims – which likely won’t be reflected in tomorrow morning’s monthly jobs report – and instead focused on Dell’s reaffirmation of its earnings guidance. But stocks sold off late in the day on the mysterious downing of a Russian jetliner and a rare anthrax case in Florida. Officials said neither incident was terrorism, but they nonetheless served as reminders of the ever-present threat.

Dell surged 1.74 to 22.38. Juniper rose 1.32 to 13.32 on a Morgan Stanley upgrade, but gave back more than half of its gains by the close.

webMethods soared 1.35 to 8.45 on a better-than-expected warning, and Check Point rose .92 to 26.91 on its warning. But Corning fell 1.30 to 7.70 on its earnings warning, and Research in Motion lost .30 to 15.45 on a warning. Global Crossing lost half its value on a warning.

TyCom soared 4.97 to 14.43 on news that it will be reacquired by parent Tyco .

Storage stocks surged on Dain Rauscher Wessels upgrades, led by Emulex and QLogic .

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: http://www.afterhourstrading.com/column.html

Some potential reversal signs today, particularly on the S&P 500, which formed a gravestone doji, essentially an unchanged day with a long upper “shadow,” meaning the index gave back strong gains by the close (first chart). The S&P continues to form a bearish rising wedge, which means that institutions may be using this rally to sell. Resistance is 1095, and critical support is about 1063 for tomorrow. The Dow (second chart) is also forming a rising wedge, with resistance tomorrow at 9300, and support at 9045. The Nasdaq (third chart) will form a reversal called an evening star if it gaps down and continues down tomorrow. The Nasdaq entered its September 17 gap between 1613-1669 today, and was turned back at the exact midpoint – 1641 – a frequent support or resistance level in gaps. The 1670 level should act as resistance if the Nasdaq can get that high. Support is 1580.

Special report: For a free introduction to technical chart patterns and an overview of last year’s action in the stock market, visit http://www.internetstockreport.com/guest/article/0,1785,2571_500051,00.html.

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