Blue chips and chip stocks led the market back Friday from a steep decline over deflation concerns.
The ISDEX http://www.wsrn.com/apps/ISDEX/ fell 5 to 187, and the Nasdaq slipped 6 to 1956, its lowest weekly close since April 9. The S&P 500 rose 6 to 1190, and the Dow surged 117 to 10,416. Volume fell to 959 million shares on the NYSE, and 1.4 billion on the Nasdaq. Advancers led 19 to 11 on the NYSE, but decliners led 18 to 16 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.
An unexpected 0.9% drop in the Producer Price Index sparked deflation concerns, but the decline was largely due to falling energy costs.
But a positive conference call from Texas Instruments
that said business may be stabilizing boosted stocks. TXN rose .45 to 34.65, and Intel
added .35 to 30. But Applied Materials
lost .60 to 44.25 ahead of its earnings report next week.
Software stocks were battered on a downgrade from Goldman Sachs analyst Rick Sherlund, who said estimates don’t yet reflect the full slowdown in IT spending. Oracle
fell 1 to 14.99, Siebel
lost 1.67 to 28.10, and Microsoft
added .19 to 65.20, but not before a plunge through 64.20 support. The stock found support at 62.90, just above its 200-day moving average.
fell 2.04 to 60.80 on layoff rumors, but the stock held critical 60 support. The company denied the rumors.
lost 1.97 to 20.50 on accounting concerns.
lost 2.22 to 63.50 on news that China Unicom may face funding delays.
declined 2.45 to 21.60 on news that it will acquire iPlace.
slipped .03 to 5.60 after matching estimates with a 7-cent loss, but missing revenue estimates and warning.
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Another day, and more hammers and dojis marking support. Now can the indexes turn up? Monday is a possible cycle turn date, so the timing is interesting. First, there was no real buying pressure on the NYSE today, with the TRIN above 1.0 most of the day, and even less buying pressure on the Nasdaq, so that needs to improve for this rally to have a chance. And second, the Dow and S&P (first and second charts) ran straight into resistance at the highs today. A move above 1200 on the S&P and 10,500 on the Dow would be a plus. The Dow negated its recent breakdown, but that trendline off the lows looks like a more important level, and the index also is hitting its main downtrend line in that area. Until it clears that level, the Dow just looks like a back test of a breakdown. 10,200 is critical support on the Dow, which it held today, and the S&P has support in the 1155-1175 range. The Nasdaq (third chart) has support at 1934-1941, which it undercut today, and resistance in the 2000-2010 range. Today’s low of 1915 could provide some support. One negative is that the put-call ratio did not spike high enough for a short-term bottom. On the plus side, next week is options expiration, which is usually flat-to-up, but has been down the last two months.
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