Stocks dropped Monday on analyst downgrades to Intel.
The ISDEX http://www.wsrn.com/apps/ISDEX/ lost 2 to 206, and the Nasdaq fell 32 to 2034. The S&P 500 dropped 13 to 1200, and the Dow fell 111 to 10,401. Volume fell to 817 million shares on the NYSE, and 1.1 billion on the Nasdaq. Decliners led 18 to 11 on the NYSE, and 22 to 13 on the Nasdaq. For earnings reports, visit our earnings calendar at http://www.wsrn.com/apps/earnings/internet.xpl and reported earnings at http://www.wsrn.com/apps/earnings/ireported.xpl. For after hours quotes and news, visit our after hours trading site at http://www.afterhourstrading.com.
Intel dropped 1.40 to 30.28 after Lehman Brothers analyst Dan Niles said the company will cut high-end chip prices by 50% on August 26, accelerating its price way with AMD
, which lost 1.63 to 17.62. Salomon Smith Barney cut earnings estimates on the stock.
Cisco slipped .51 to 19.54 ahead of its earnings report after the close tomorrow. Investors are worried that Cisco will abandon its long-term growth projection of 30%-50%.
Oracle lost .54 to 17.46 on a Wall Street Journal article that questioned the company’s claims about acceptance of its 11i suite.
Qualcomm rose .44 to 67.30 on positive comments from Salomon Smith Barney.
CacheFlow add .06 to 4.36 after pre-announcing better than expected results.
Alcatel and Marconi
dropped after S&P cut the firms’ debt rating.
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Negative signs abound today. The Nasdaq followed up on Friday’s bearish reversal by gapping back below its downtrend line (first chart). That line should be around 2050-2060 for tomorrow, and 2028 is first support. Also, the Nasdaq had a rare bearish weekly moving average crossover this morning (second chart), something not seen in a major U.S. index in many years. The only other index we’ve seen that in in this bear market has been the Dow Transports, a bearish sign in itself because of the Transports’ importance to Dow Theory. Coming in a significant cycle turn window (today through Wednesday), it’s not a good start to a critical period. With second quarter productivity coming out tomorrow morning and Cisco’s earnings due out after the close tomorrow night, this market could be ready to break out of its trading range by Wednesday. The Nasdaq 100 (third chart) barely held its downtrend line breakout today, but the S&P 500 (fourth chart) did not, another negative. Almost any move higher tomorrow could get the S&P back above that line. The Dow (fifth chart) broke 10,430-10,475 is support. A break of the 10,300 level would just about do in the old industrials. 10,600 is critical resistance.
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