Intel, Consumer Confidence Sink Stocks

Stocks fell Tuesday on a much weaker than expected consumer confidence reading and cautious comments from Intel. Stronger than expected durable orders weren’t much help.

The Nasdaq dropped 43 to 1347, the S&P 500 lost 13 to 934, and the Dow fell 94 to 8824. Volume surged to 1.23 billion shares on the NYSE, and 1.51 billion on the Nasdaq. Decliners led 19 to 12 on the NYSE, and 22 to 10 on the Nasdaq.

After the close, Hewlett-Packard missed revenue estimates and said IT spending remain weak, but the company reaffirmed guidance. Semtech warned.

During the day, Intel fell 5% after saying that business remains tough. The semiconductor index lost 6% on the day, with Novellus , Applied Materials and KLA-Tencor all losing 5-6%.

Storage Tech rose 3% on an upgrade.

UTStarcom and CDW fell 7% each on downgrades.

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.

Today’s selling had some volume behind it. If that continues, and if the TICK gets below -1,000 (today it only got to -827 on the NYSE), this correction could last for more than a few days. The S&P (first chart below) could be headed for 897 minimum on a clean break of 930 support. 915 is a possible support, and 950 should now be tough resistance (see second chart below). If it can clear that, 975 is possible. The big-cap S&P 100 (third chart) looks broken. Below 8750, the Dow (fourth chart) would likely be headed for at least 8350. If it can turn up above 8850 tomorrow, 9250 is still possible. The Nasdaq (fifth chart) would break down on any move down tomorrow. 1355-1360 is first resistance. And finally, are the banks (sixth chart) back-testing a breakdown? They would need to begin heading down soon if that’s the case.






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