A tumultuous week ended on an up note Friday as Internet stocks led the market higher, but the quarter was one investors — especially those holding ‘Net and tech shares — would just as soon forget.
Internet stocks bounced back from two consecutive days of heavy losses, as internet.com’s Internet Stock Index, or ISDEX, gained 6.41, or 3.2%, to 205.72. The ISDEX closed Wednesday below 200 for the first time since November 1998.
The Dow Jones rose 79.72, or 0.8%, to 9878.78, while the Nasdaq climbed 19.69, or 1.1%, to 1840.26. The S&P 500 inched up 12.38, or 1.1%, to 1160.33.
Among ‘Net sectors, only the Wireless group had more losers than gainers on Friday. An appropriate finish to the quarter, for Wireless so far this year has been among the worst-performing — if not the worst — of the 13 Internet groups tracked by the Internet Stock Report. (Look for Internet sector results for the first quarter in Monday’s Morning Report.)
Here are the quarterly results for the major exchanges and the ISDEX:
Dec. 29 March 30 %Change ISDEX 361 206 -43.0% Nasdaq 2470 1840 -25.5% Dow Jones 10,787 9879 -8.4% S&P 500 1320 1159 -12.2%
As you can see, Internet tickers and the tech-heavy Nasdaq are sustaining the most damage from the slowdown in spending and declining consumer confidence. Yet Internet stocks may be further from a bottom than blue-chips and other stocks because many still remain relatively overvalued. Plus there’s no resumption in sight to the aggressive revenue growth that traditionally fuels market demand for technology-related stocks.
And, more immediately, an upcoming earnings season promises to exert more downward pressure on beleaguered ‘Net tickers. (For earnings reports, visit our earnings calendar and our reported-earnings page. For after-hours quotes and news, visit After Hours Trading.)
Here’s technical analysis from Paul Shread:
March 29, 4 p.m.: The Nasdaq 100 once again found support at its lower
falling wedge boundary today at 1530 today (first chart); we’ll place
that line at 1517 for Monday. And the Nasdaq also held its recent 1794
low beautifully. All of that would have us feeling pretty positive about
the techs here – except that buyers have yet to materialize. Stocks can
drift down a long way without buyers. Also, semiconductors were very
weak today, another negative sign because they usually lead the Nasdaq.
A break of 1794 on the Nasdaq would be a big negative, while a move
above 1950 would be a big plus. The Dow and S&P 500 continue to look
stronger, and both indexes continue to find support from the bullish
three consecutive white candlesticks formed a few days ago (second and
third charts). For the Dow, 9687 is the first strong support, followed
by the 9400-9500 level. Important resistance is 9980. The S&P 500
continues to find support at 1140, and 1120 is the next support below
that. Key resistance is 1182. The yield curve, meanwhile, has become
more inverted on the lower end after looking very promising earlier this
week (fourth chart); another negative.