Good Economic News Buoys Stocks

Stocks rose Tuesday on favorable consumer confidence and manufacturing readings.

The ISDEX surged 4 to 131, and the Nasdaq bolted 31 to 1688. The S&P 500 rose 11 to 1076, and the Dow gained 126 to 9946, but was repelled at the 10,000 level. Volume surged to 1.55 billion shares on the NYSE, and 2.08 billion on the Nasdaq. Advancers led 22 to 9 on the NYSE, and 22 to 13 on the Nasdaq.

After the close, Hewlett-Packard’s merger with Compaq was upheld by a judge, Sycamore warned, Adobe and Dell reaffirmed guidance, Pegasus beat estimates, S1 warned, and Peregrine delayed its earnings release.

During the day, FreeMarkets fell 8% despite beating estimates, while Genesis Microchip soared 18%. surged 12% despite missing estimates.

Macrovision gained 14% on better than expected results, but Looksmart and GlobeSpan Virata plunged about 30% each.

CSG , ONI and JNI gained on their results.

WorldCom gained 5% on news that CEO Bernie Ebbers is stepping down.

IBM slipped on negative analyst comments.

Micron fell after the company’s Hynix acquisition was rejected.

Oracle set a new 52-week low, but held onto the important $10 level. At a PE of 24, it’s one of the few profitable big tech names, but selling in the stock has continued unabated.

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.

The end-of-the-month/start-of-the-month rally arrived right on time, and should continue for another day or so. However, the VIX, the options volatility index, fell 10% today, an early hint of complacency. And the S&P 500 and 100 (first and second charts below) remain well under the critical resistance levels of 1100 and 547, respectively. 1074, 1064 and 1054 are support on the S&P. The Nasdaq (third chart) tested the important 1696 level today. If it breaks through that, 1725-1734 is the next resistance level, and a toughie at that. The Nasdaq has support at 1670-1680, and very good support in the 1619-1640 range (1627). The Dow (fourth chart) failed at 10,000 resistance today, but 10,070 looks like the real level to beat. 9929 is first support, then 9800 and 9600-9700. The one positive in the Dow and S&P charts is they regained some significant breakdowns from yesterday.




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