Market Gives Back Gains

The stock market gave back a big chunk of Tuesday’s huge gains on Wednesday, dragged lower by earnings warnings from Apple Computer and Bank of America and rumors that Intel may warn.

The ISDEX fell 14 to 457, and the Nasdaq declined 93 to 2796. The S&P 500 lost 25 to 1351, and the Dow dropped 233 to 10,665. Volume declined slightly to 1.36 billion shares on the NYSE and 2.3 billion on the Nasdaq. Decliners led by 16 to 12 on the NYSE and 23 to 15 Nasdaq. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our after hours trading site.

Intel fell 3 13/16 to 32 3/16 on a Salomon Smith Barney report that the company’s quarter could be the worst in a decade.

Juniper Networks fell 16 5/16 to 139 11/16 after Ericsson sold shares in the company to raise money for next-generation wireless initiatives.

Yahoo dropped 6 1/2 to 37 3/8 after Merrill Lynch cut earnings and revenue estimates on the company.

VerticalNet plunged 2 5/16 to 8 5/8 after Merrill Lynch cut its rating from Buy to Accumulate because of electronics exchange business concerns.

Freeserve dropped 1 1/2 to 19 1/2 despite a buyout offer from France Telecom for 0.225 FTE shares per FREE share. , off 1/16 to 15/32, said it will hold a special shareholders meeting to vote on a reverse stock split to meet Nasdaq $1 listing requirements.

Broadcom slipped 3 7/16 to 114 3/4 after trading as high as 126 on news that its Blutonium chip received Bluetooth certification for local wireless networks.

Inktomi rose 3 7/16 to 37 7/8 on a deal with Hughes satellite.

InterNAP rose 1/2 to 14 7/8 on a Bear Stearns Buy rating.

Some technical comments on the market: Note: We are now including charts in the technical market commentary. If you can’t get the charts via the e-mail newsletter version, try this link:

It’s an odd pattern, but the Nasdaq 100 may have broken a rising wedge that formed off its rocketship move yesterday. We may fill yesterday’s opening gaps sooner than we thought, particularly if Intel’s quarter shapes up to be as bad as rumored. Those gaps would be filled at 2615 on the Nasdaq and 1325 on the S&P 500. The Philadelphia Semiconductor Index got as high as 615 today, a level that would negate its recent breakdown on a closing basis, but then pulled back under 600. In short, not quite getting everything we wanted, but Greenspan may still have put a floor under the market.

The Nasdaq may have run into resistance at its old breakout line today (first chart). If you look at that channel in a logarithmic chart (second chart), which weights moves by percentage, we’re back in an old channel, and one that is probably more sustainable over the long run.

The ISDEX set a higher high above 434, and also took out its broken support line at about 450, both real positives for Net stocks, but then turned back at its late November high at 481. Can that 450 line hold as support now?

The S&P 500 went vertical yesterday, clearing its upchannel off its recent lows. One more sign that the market may need to back an

d fill here.

The Dow is pulling back much more than we were hoping for, a negative. One more reason to hold off calling this a bottom before we take out 1400 on the S&P, 3000 on the Nasdaq, and 11,000 on the Dow.

Special report: For a free introduction to technical chart patterns and an overview of this year’s action in the stock market, visit,1785,2571_500051,00.html.

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