Technology shares will almost certainly head sharply lower on Friday, as an earnings warning from Intel issued after the market close on Thursday sent shares of leading technology companies like Microsoft, Dell and Cisco sprawling after hours. Intel plummeted from 61 to 50.
During regular trading, the ISDEX fell 18 to 787, and the Nasdaq dropped 68 to 3828. The S&P 500 slipped 2 to 1449, but the Dow rose 77 to 10,765 on a bullish outlook from 3M. Volume was unchanged at 1.1 billion shares on the NYSE, but slipped to 1.6 billion on the Nasdaq. Decliners led 17 to 10 on the NYSE and 24 to 14 on the Nasdaq. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our new after hours trading site.
Also after the close, Liberate , up 7/16 to 29 1/8 during the day, and CMGI
, unchanged at 36 7/16, both slipped more than a point after hours after beating earnings estimates. Liberate, which rose during the day on news of a pilot with AT&T, beat estimates by 12 cents with a 9-cent loss, and CMGI beat by 28 cents with a loss of $2.17 a share.
Priceline.com fell 2 3/16 to 21 1/4 in advance of what is expected a negative piece on CBS’ 48 Hours show tonight. Celebrity spokesman William Shatner will reveal that he has never used the site to buy discount airline tickets. The show is also expected to focus on customer complaints; the company was removed from the Better Business Bureau earlier this month for failing to eliminate complaints such as misrepresenting products, not providing promised refunds, and not correcting billing errors, according to the Wall Street Journal and Bloomberg.
Engage rose 1/4 to 8 5/16 after trading as high as 10 3/8 after beating earnings estimates by 14 cents with a 14-cent loss. The company also announced that it would lay off 175 employees, or about 13% of its workforce, and reorganize from five units to two, moves it said would save $21 million a year. The company will take a first quarter charge of about $3.5-4 million. But DoubleClick
did not follow Engage higher, slipping 1 3/16 to 39 1/16.
eBay gave back 7 1/16 to 69 1/2 after soaring more than 10 points yesterday on a bullish long-term growth forecast. CS First Boston downgraded the stock to Buy from Strong Buy, but upped its price target to $90 from $72.
PurchasePro gained 1 1/8 to 74 1/4 after announcing a 2-for-1 stock split. The stock soared 11 points yesterday on a Lehman Brothers Buy rating and $120 price target.
Foundry Networks rose 1/2 to 59 on news that Yahoo
will use the company routers and solutions for GeoCities.
Netegrity gained 4 25/32 to 60 21/32 on a Wit SoundView Strong Buy rating and $77 price target.
Some technical comments on the market: As we said at noon time, the market is not looking very good here, and Intel’s warning certainly explains why it looks like the bears were about to take control. We’ll go straight to the Nasdaq. The old October trendline at 3700 will almost certainly be tested tomorrow. If it breaks, the Nasdaq has one more chance to halt a wider sell-off in the 3521-3600 area. If 3500 breaks, the May low of 3042 will almost certainly be retested. We had plenty of warning that something was wrong when the Nasdaq failed at its 38% retracement level of 3913 and then gave back all of yesterday’s gains and then some.
The S&P 500 is consolidating beneath its October 1998 trendline (1450) broken yesterday, itself a sign of possible further downside. Next support is 1435-1440, then 1425
, 1414, and then critical support at 1405: the line connecting the March (1325), April (1340) and May (1361) bottoms. To negate this bearish scenario, the S&P needs to get above 1460 and stay there. The Dow three days ago broke back inside the upper boundary of the diamond pattern (just above 10,800); the next day it touched both the upper and lower diamond boundaries, reinforcing the pattern; and then yesterday it broke the pattern to the downside. Today it retraced to the lower boundary again (around 10,750), piercing it before closing right on it. To reestablish control, the bulls need to get the Dow through 10,750-10,850 resistance. To the downside, a break of the October 1998 trendline at 10,500 would be a huge negative. The ISDEX has so far held support in the 787-800 range; much lower and that area will become resistance again. Below that is 750 support and then the May uptrend line at about 720. If the ISDEX can clear 800 resistance with any style, it could have room to 850, the 50% retracement level.
