The prospect of a prolonged period of uncertainty over the outcome of the presidential election sent stocks sharply lower on Thursday, but they clawed their way back by the end of the day. Internet stocks remained under pressure on earnings worries.
A recount in Florida narrowed the race even further, and Democrats and Republicans both demanded further recounts. Democrats launched court challenges. The earliest the race could be decided now appears to be Nov. 17, when 30,000 foreign absentee ballots are due in Florida.
dropped 25 to 581, and the Nasdaq fell 31 to 3200, 113 points of its low. The S&P 500 lost 9 to 1400, and the Dow declined 72 to 10,834. Volume surged to 1.11 billion shares on the NYSE and 1.91 billion shares on the Nasdaq. Decliners led by 17 to 10 on the NYSE and 26 to 12 on the Nasdaq. The Producer Price Index came in stronger than expected, but the core rate came in better than expected. Dell Computer matched earnings estimates after the close. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our after hours trading site.
Internet advertising stocks were weak on earnings warnings from 24/7 Media
, off 1 3/4 to 2 15/16, and Engage
, down 1 to 2 1/2. DoubleClick
lost 3 1/4 to 15 1/2, and Yahoo
dropped 6 1/8 to 58 7/8.
Internet Capital Group
, off 5 1/8 to 11 1/8, reported disappointing earnings and announced a 35% workforce reduction. CMGI
lost 3 13/16 to 18 on the ICG and Engage news. Digital Island
, off 1 1/2 to 10, beat estimates but lowered forward guidance.
, off 2 7/8 to 48 3/4, continued to lose ground after announcing layoffs.
Internet infrastructure companies continued to struggle in the wake of cautionary comments from Cisco Systems
lost 8 1/2 to 179 5/8, but Broadcom
recovered 9 13/16 to 161 5/8 after announcing that it is “very comfortable” with analysts’ projections.
lost 3.68 to 52.62 after the Federal Trade Commission delayed a vote on the company’s merger with Time Warner by three weeks.
slipped 3/4 to 2 despite beating estimates.
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The S&P 500 broke its large rising wedge to the downside when it appeared that the Democrats were going to put up a protracted fight, but the index recovered back above that line as we had hoped. That break came at least 7-8 trading days before the two-thirds point, where wedges typically break. Interestingly, the selling stopped at the 1994 logarithmic trendline at about 1370. While the index appears to be okay for now, we still expect a retest of 1300 some time in the next couple of months. To the upside, 1420-1460 is tough resistance.
The Nasdaq 100 turned up after hitting its minimum downside target of 2956, where its bearish wedge or pennant began (the index actually went as low as 2923). However, given that that pattern also could be seen as either a head and shoulders pattern or a 500-point trading range, the index could eventually have downside to 2500 or lower. We now have another lower hig
h and lower low on the Nasdaq 100, another bearish development. The index may be okay for now, but a break of that S&P wedge later this month or in December could spell trouble for techs.
The ISDEX is forming similar patterns: a potential bear flag was broken today, and the index may also be forming some manner of head and shoulders pattern. Downside potential is 450-500, but the index found support just under 560 today, the fourth time it has bottomed in that range.
The Dow broke down out of a 250-point trading range to the downside today after failing at 11,000 repeatedly. That index too recovered nicely, but remains in danger of forming a lower high to go with its lower low of last month. To the downside, we’d like to see the Dow not close below its old diamond apex at 10,850 by more than 2%.
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