Interest Rate Jitters Rock Stocks

Stocks fell sharply Wednesday after stronger than expected housing data raised inflation fears. Tech stocks fell on concern about Intel’s earnings.

The ISDEX fell 6 to 160, and the Nasdaq dropped 48 to 1832. The S&P 500 lost 18 to 1152, and the Dow fell 133 to 10,501. Volume edged higher to 1.28 billion shares on the NYSE, and 1.54 billion on the Nasdaq. Decliners led 21 to 10 on the NYSE, and 21 to 13 on the Nasdaq.

After the close, Tibco fell after missing revenue estimates.

During the day, Intel fell 4% after Salomon Smith Barney cut earnings estimates for the next two years.

VeriSign lost 9% on concerns about over reliance on revenue from reciprocal relationships and related parties, based on the company’s 10K filing.

Genesis Microchip fell 9% after the company’s CFO resigned.

Jabil rose 6% after topping estimates and raising guidance.

Red Hat fell 18% on its earnings report, and Mercury Computer plunged 14% after warning. TriQuint slipped 1% after guiding slightly lower.

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 Dow (first chart) went about as low as it can go today without negating the bullish ascending triangle that may be forming in the index. However, it would need to break 10,475 and then 10,425 – or 10,700 to the upside – to leave the range that it’s been in for the last two weeks. The Nasdaq (second chart) is clearly forming a down channel here. 1830 is first support, and 1793-1805 is critical. A move above that upper trendline at 1880 would look pretty good. The S&P (third chart) has critical support at 1138-1142, and critical resistance at 1175-1180. The SOX (fourth chart), the semiconductor index, is sitting right on a critical level at 580; much lower and 550 becomes next support. A number of indicators suggest that the market could top out here, but the first two weeks of April are among the most seasonally positive in the market. A bounce at 1140 on the S&P and 1800 on the Nasdaq could be a good set-up for a rally, but the market could remain on the defensive through the end of the month.




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