Commerce One Sells Off Despite Beating Estimates

Commerce One fell in after-hours trading on Tuesday despite a stronger-than-expected earnings report. Microsoft, Intel and DoubleClick rose slightly after beating estimates.

Stocks sold off during the day after a stronger than expected increase in the Consumer Price Index for June. The ISDEX fell 26 to 810, and the Nasdaq dropped 97 to 4177. The S&P 500 fell 16 to 1493 and the Dow lost 64 to 10,739. Volume declined to 909 million shares on the NYSE and 1.49 billion on the Nasdaq. Declining issues led 16 to 11 on the NYSE and 24 to 15 on the Nasdaq. The Consumer Price Index showed a 0.6% increase in June; analysts had expected a 0.4% rise. The core came in at 0.2%, in line with estimates. While the increase was mainly due to energy prices, traders nonetheless were bracing for Fed Chairman Alan Greenspan’s Senate Banking Committee testimony on Thursday. For earnings reports, visit our earnings calendar and reported earnings.

Commerce One reported a loss of 10 cents a share, 3 cents better than estimates. Revenues rose 1,400% to $62.7 million. The stock rose 2 3/16 to 66 9/16 in regular trading, but fell to 62 after the earnings report. USB Piper Jaffray had rated the company a Strong Buy earlier in the day. Technical note: the stock’s recent breakout from a three-month symmetrical triangle remains in effect as long as the stock stays above the breakout point of $52.

DoubleClick fell 2 1/4 to 35 1/4, but rose to 36 after reporting a second-quarter loss of 3 cents a share, 2 cents better than estimates. DoubleClick has been plagued for weeks by concerns about a decline in Internet advertising, but Morgan Stanley Dean Witter analyst Mary Meeker told CNBC earlier in the day that she expects Internet advertising to double or triple for several more years.

i2 Technologies , up 3 1/8 to 139 in regular trading, rose to 142 after reporting earnings of 10 cents a share, 2 cents better than estimates. RealNetworks rose 2 to 58 in regular trading, but slipped to 55 after hours, after reporting earnings of 6 cents a share, a penny better than expectations.

Traders were in a sell-on-the-news mood during Tuesday’s regular trading session. Go2Net posted earnings after the bell on Monday of 22 cents a share, seven cents better than estimates and up more than 200% from a year ago. But the stock, which rose as high as 64 in after-hours trading on Monday, fell 6 7/8 to 51 1/8. WebTrends reported earnings of 7 cents a share, a penny better than expected, but fell 5 11/32 to 37 5/32. ISS Group also declined on better-than-expected numbers, falling 16 5/8 to 90 3/8. Traders were apparently disappointed that some of the company’s managed services products won’t be rolled out until the fourth quarter or early next year. DSL supplier Copper Mountain fell 29 15/16 to 93 3/4 despite beating estimates. The stock had run up in advance of earnings.

But Interwoven added 1 7/16 to 71 15/16 after posting a second-quarter loss of 2 cents a share, 3 cents better than expected. And iPrint.com soared 1 7/16 to 7 11/16 after announcing a 900% increase in second-quarter sales.

Digital Island also beat estimates, but fell 6 11/16 to 37 15/16 on news that it will acquire SoftAware Networks for $450 million in cash and stock. Dain Rauscher Wessels downgraded the stock to Buy from Strong Buy on concern that EBITDA losses will continue to rise on the acquisition.

DLJ Direct sent online brokers lower after missing earnings estimates. DLJ declined 13/16 to 7 3/4, E*Trade fell 1 3/8 to 17 3/4, and Ameritrade was off 5/8 t

o 13.

ExciteAtHome added 9/32 to 19 27/32 on news that Dutch ISP Chello Broadband will link its operations with the non-U.S. businesses of ExciteAtHome.

Amazon.com gained 13/16 to 41 15/16 on a Wit SoundView Buy rating. The stock turned back at 45 resistance recently.

Stamps.com gained 1 1/8 to 6 7/8 on rumors that Hewlett-Packard may acquire the company.

Software.com gained 5 3/8 to 128 3/8 on a positive mention from Merrill Lynch, which reiterated Accumulate and raised its price target to $140.

YouBet.com rose 11/32 to 3 9/16 after the U.S. House of Representatives defeated a bill that would have banned most forms of online gambling.

GoAmerica gained 1 to 14 9/16 on news of an alliance with Staples.

ebookers.com continued to soar on news that it is seeking $39 million to help it become cash-flow positive, rising 1 29/32 to 11 5/8.

Some technical comments on the market: The S&P 500 broke its rising wedge to the downside this morning. It did so on a gap down at the open, underscoring the significance of the move. Volume was higher in the morning on the break, then dwindled in the afternoon as the indexes consolidated. The break sets up a likely return to the 1440 level, where the wedge began, but first the index will have to get through 1475-1490 support. Note: the S&P did not trade above the upper boundary of the wedge yesterday afternoon, as we reported in yesterday’s Market Close, but turned back right at the upper boundary; a glitch in our data feed led to the misreading. Another sign that the trend may have changed is the doji candlestick pattern in the Dow and S&P yesterday, where both indexes fell and rose in the same day and yet finished unchanged, signaling indecision on the part of traders. Critical support on the S&P 500 is at 1380. The Nasdaq is still forming a rising wedge in the daily and weekly charts, a troubling sign because it encompasses all of the index’s rally since bottoming at 3042. The classic interpretation of this would mean that the Nasdaq is in a bear market rally. The Nasdaq turned back at the upper boundary of the rising wedge yesterday (4289), reinforcing the pattern. A break of the rising wedge to the downside, below 4050, would imply a return to the 3042 level, and potentially lower. Again, we will wait for the breaks for confirmation. Should this be the end of the rally, then the Nasdaq has turned back about 1% from its 62% retracement level of 4337. A break below 4073 would negate the index’s recent breakout. Below that, recent support is in the 3820-3830 range, and key support is at 3725 and 3585. The ISDEX turned back yesterday at 840, just below its 50% retracement level of 845. A break of 850 resistance would likely carry the index to 880, while a break below 790 would negate the ISDEX’s recent breakout. To the downside, 700 has proven strong support; a break of that number could give the index room to 600. The upper and lower boundaries of the Dow’s bearish diamond pattern are 11,000 and 10,200-10,300, respectfully. The index turned back just under 10,850 resistance yesterday (10,847). Its recent breakout occurred in the 10,620-10,700 level, so we don’t want to go below 10,620.

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