JDS Uniphase beat revenue and earnings estimates after the bell on Thursday, giving hope to optical networking stocks, which recovered in the afternoon after two days of heavy selling.
The ISDEXfinished unchanged at 606 after setting a new yearly low earlier in the day, and the Nasdaq rose 42 to 3272, a 190-point comeback. The S&P 500 slipped fractionally to 1364, and the Dow rose 53 to 10,380. Volume rose slightly to 1.3 billion shares on the NYSE and 2.3 billion on the Nasdaq. Advancers led by 14 to 13 on the NYSE, but decliners edged advancers on the Nasdaq. The employment cost index provided some relief from inflation worries, but traders were more concerned about tomorrow’s GDP report. Dallas Fed President Robert McTeer said yesterday that the GDP report could come in much weaker than expected, fueling fears of a sharp economic slowdown. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our after hours trading site.
JDS Uniphasesurged 8 points to 82 after hours after the company’s 18-cent earnings beat estimates by 2 cents. Revenues of $786.5 million beat estimates of $750-$760 million, and the company guided forward estimates higher. The company traded as low as 62 during the day, as investors were spooked by Nortel’srevenue miss on Tuesday. Juniper Networkswas off 7 5/8 to 188, well off its low of 159 5/8, and avoiding a breakdown out of a broadening top. A close below 174 would have been a big negative.
Inktomidid not fare as well after hours. The company beat estimates by 2 cents with 7-cent earnings, but lowered forward guidance, and the stock dropped 7 to 76 in after-hours trading.
During the regular trading session, Amazon.comgained 4 1/4 to 36 1/8 despite a Lehman Brothers report that claimed the company had reclassified $96 million in equity investments as cash, inflating the company’s cash level by 10%. Lehman said the reclassification raises balance sheet concerns, and continued to urge investors to avoid Amazon’s convertible bonds.
InfoSpacetacked on 1/16 to 20 3/8 after reporting earnings of 3 cents a share, 3 cents better than expected. VeriSigndropped 3 11/16 to 143 3/4 despite blowing away estimates by 12 cents with 18-cent earnings. However, there was some concern about deferred revenues in the report.
webMethodsfared better, rising 10 3/8 to 95 3/8 after beating estimates by 11 cents with breakeven results. Vignettefell 3 1/16 to 26 1/8 after matching estimates with a 1-cent loss.
Rare Mediumadded 11/16 to 5 1/16 after beating estimates by 3 cents with 4-cent earnings. iVillagetacked on 11/32 to 2 3/32 after a better-than-expected loss. Agency.comslipped 7/8 to 10 3/4 after 7-cent earnings beat estimates by a penny.
Evokelost 11/16 to 4 13/16 on a better-than expected loss. PlanetRX.comslipped 1/8 to 11/32 despite beating estimates. Tanning Technologydropped 2 3/32 to 6 3/16 despite beating estimates by 3 cents with 8-cent earnings.
Modem Media, up 15/16 to 6 1/4, beat estimates by 3 cents with 1-cent earnings. BackWebrose 1/4 to 6 1/4 after beating estimates by a penny with a 1-cent loss. Peapodrose 1/16 to 1 1/16 despite missing estimates by 9 cents.
barnesandnoble.comrose 5/16 to 4 1/4 on news that the Web site will be
integrated with the operations of parent company Barnes & Noble.
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JDSU came through, and we had a nice reversal on higher volume during the day. It would have been nice to see better breadth and a positive finish on the S&P 500, but it’s a start. So is this reversal going to be any better than the others? The GDP report tomorrow morning will be the first test. If economic growth slows significantly, say to 1-2%, investors could get spooked.
The Nasdaq had its fourth test of the 3050 range (3081) and reversed all the way up to its September downtrend line. Above that line, which we’ll put at today’s high (3286), is 3500 resistance, which has been very tough to crack. The S&P 500 ventured back below its 1994 logarithmic trendline at about 1350, getting as low as 1337. S&P cannot close below that line by more than 2%, or 1323. The S&P found support at its September downtrend line and could be forming an inverted head and shoulders bottom. The secondary downtrend line is first resistance at about 1380. The ISDEX retested its May low around 560 today, getting as low as 552. The ISDEX’s broken September downtrend line is now at about 560; the index pierced that line but recovered today. The Dow took out its secondary downtrend line around 10,400. 10,500, 10,600 and 10,800 could all pose resistance for the old industrials.
