GE, IBM Send Stocks Sprawling

Stocks plunged Thursday after GE missed revenue estimates and IBM was once again hit by accounting concerns.

The ISDEX fell 7 to 138, and the Nasdaq plunged 41 to 1725. The S&P 500 lost 26 to 1103, and the Dow slumped 205 to 10,176. Volume rose to 1.51 billion shares on the NYSE, but declined to 1.70 billion on the Nasdaq. Decliners led 20 to 10 on the NYSE, and 23 to 12 on the Nasdaq.

After the close, DoubleClick topped estimates but warned; Juniper met estimates but guided slightly lower; RSA missed estimates; Powerwave , Mercury Interactive , and Elantec beat estimates; and Cree matched estimates.

During the day, GE plunged 9% to its lowest close since September 21. IBM fell 5% to its lowest close since December 2000 on reports of an SEC investigation. After the close, the SEC took the unusual step of saying that an inquiry was opened, but that it was closed without action. IBM and index futures rose on the news.

Yahoo fell 16% after beating estimates because much of the upside came from the acquisition of HotJobs. Yahoo said ad spending has stabilized but remains tough. and Network Associates helped security stocks with better than expected results.

Redback fell 9% after missing revenue estimates, and Cognos lost 10% on a warning.

Nokia and AOL were hit hard on rumors of fund liquidations and large block sales.

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

As we said yesterday, there were a number of negative signs that had us doubting yesterday’s rally, and that hunch sure turned out to be right. The Dow (first chart) fell back into its down channel today, a bearish breakout failure. 10,120-10,154 is first support, but that channel gives the index potential down to 9980. 10,210 is first resistance, and 10,280 and 10,350 are critical hurdles. The S&P (second chart) should find support at 1100 tomorrow; if it doesn’t, look out below. First resistance is 1119, and 1130 is critical resistance. The S&P 100 (third chart) continues to hold critical 545 support, but not by much. The Nasdaq (fourth chart) filled its February gap at 1724 today; next support is 1696-1715, and it’s a critical one. 1750-1760 is the first significant resistance; above that, the index could have room to run. The Nasdaq 100 (fifth chart) broke its February lows today, but is holding above critical 1280-1300 support. If we had to peg two levels the market needs to hold, they would be 545 on the OEX and 1280-1300 on the NDX.





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