Fed Chairman Alan Greenspan softened his stance on interest rates on Tuesday, and stocks soared in approval. With the end of the presidential election in sight, traders found plenty of reason to buy.
The ISDEX soared 45 to 451, and the Nasdaq surged 187 to 2802. The S&P 500 gained 37 to 1362, and the Dow rose 259 to 10,818. Volume surged to 643 million shares on the NYSE and 1.14 billion on the Nasdaq. Advancers led by 19 to 7 on the NYSE and by 26 to 10 on the Nasdaq. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our after hours trading site.
Cisco recovered 3 7/8 to 49 11/16 on the final day of a two-day analyst meeting during which the company reaffirmed growth estimates.
Investors piled back into old favorites. Checkpoint soared 18 3/16 to 127 7/8, Interwoven
surged 15 3/4 to 69 9/16, and Juniper
bolted 19 1/4 to 148 3/4.
Broadcom gained 3 3/8 to 115 1/8 despite a warning from 3Com
, which represents 14% of Broadcom’s business. Prudential downgraded Broadcom on the news.
Aether Systems rose 7 7/8 to 62 1/4 on positive comments from Merrill Lynch, which expects the company to beat estimates.
BreezeCOM rose 1 1/16 to 15 on a Salomon Smith Barney Buy rating and $21 price target.
Advertising-driven stocks rose on mildly encouraging comments from Merrill analyst Henry Blodget, who said the stocks should perform well if growth estimates for 2001 are even half-right. Yahoo rose 2 15/16 to 40 7/8, and America Online
climbed 2.95 to 44. DoubleClick
, up 5/8 to 12 5/8, announced layoffs.
B2B stocks were back in favor. Ariba soared 11 1/4 to 72 11/16, Commerce One
surged 6 21/32 to 34 17/32, i2
climbed 16 7/16 to 104 7/16, and PurchasePro
added 2 1/2 to 17 7/8.
Excite@Home slipped 1/4 to 5 5/8 after Banc of America lowered its price target from $57 to $20.
Some technical comments on the market: Note: We are now including 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
A lot of broken downtrends today, but a lot of opening gaps that may need to be filled at some point too. We mentioned yesterday that the Nasdaq and ISDEX retested their recent lows on lower volume, and made higher lows, all positives, and we also said that if the Nasdaq could take out 2755 and the ISDEX 434, we would break the cycle of lower lows and lower highs. So we got our wish list. Now it’s time to watch the quality of the current rally to see if it will last. Up volume is leading down volume by about 9 to 1 on the Nasdaq today, a strong sign. Also, the Philadelphia Semiconductor Index is threatening to negate its recent breakdown at 600; a close above 614 would just about do it. The Nasdaq 100 broke above its old falling wedge boundary at the open today.
The ISDEX held strong support in the 375-400 range. Not only did it set a higher high above 434, but it also took out its broken support line at about 450, both real positives for Net stocks.
The S&P 500 also broke a downtrend line today that may have been some sort of falling wedge. The broken 1994 log trendline at about
1388 could be the next resistance.
The Dow took out its downtrend line in style today after closing just under it yesterday. To the upside, we’d like to see the major indexes get above 1400 on the S&P, 3000 on the Nasdaq, and 11,000 on the Dow. That would probably just about cement the bottom.
Special report: For a free introduction to technical chart patterns and an overview of this year’s action in the stock market, visit http://www.internetstockreport.com/guest/article/0,1785,2571_500051,00.html.
