Fed Signals End To Rate Cuts

Stocks finished in the plus column but off their best levels after the Federal Reserve signaled an end to rate cuts.

The ISDEX http://www.wsrn.com/apps/ISDEX/ slipped 1 to 166, and the Nasdaq rose 3 to 1880. The S&P 500 gained 4 to 1170, and the Dow climbed 57 to 10,635. Volume edged higher to 1.25 billion shares on the NYSE, and 1.52 billion on the Nasdaq. Advancers led 17 to 14 on the NYSE, and 18 to 17 on the Nasdaq.

After the close, Jabil topped estimates and raised guidance, Red Hat matched estimates, Mercury Computer warned, TriQuint guided slightly lower, and Net2Phone sued Cisco .

During the day, Hewlett-Packard slipped 2% after declaring victory in its battle to acquire Compaq , which rose 7%. Official certification may not come for weeks, however, and the vote appeared to be very close.

Nortel and Lucent hit new 52-week lows.

ONI and Ciena each fell 5% after ONI warned. Ciena is acquiring ONI.

Homestore surged 30% after selling a unit to raise cash.

Some technical comments on the market: Note: To see the charts in the text email newsletter, click on the internetstockreport.com story link at the top of the newsletter.

The Dow’s consolidation of the last two weeks may be forming a bullish ascending triangle (first chart). A break above 10,700 tomorrow would look pretty good, and potentially carry the index to the May 2001 peak of 11,300 (watch 10,800 and 11,000 resistance). 10,510 is critical support for that bullish scenario to hold, and a move below 10,475 would confirm the direction down. That upper trendline has been tough resistance, and whichever way the index moves off that line could be worth a big move. The ideal scenario would be down for the next week or so and then up for an April rally. However, the Dow futures are about 30 points above fair value tonight; in the past, that kind of leverage has led to big up days, but the night is still young. The Nasdaq (second chart), on the other hand, looks like it is just beginning to form a down channel here. Levels to watch are 1860 to the downside and 1915 to the upside; in between those levels the index looks range-bound. The S&P (third chart) has support at 1155 and 1138-1142, and significant resistance at 1180.



Special report: For a free introduction to technical chart patterns, visit http://www.internetstockreport.com/guest/article/0,1785,2571_500051,00.html.

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