Stocks fell sharply Monday morning on terrorism fears following the crash of an American Airlines jet in New York, but the market recovered most of its losses when officials said the crash appeared to be an accident.
The ISDEX http://www.wsrn.com/apps/ISDEX/ rose 2 to 165, and the Nasdaq gained 11 to 1840. The S&P 500 lost 2 to 1118, and the Dow fell 53 to 9554. Volume declined to 991 million shares on the NYSE, but rose to 1.56 billion on the Nasdaq. Decliners led 15 to 14 on the NYSE, but advancers led by a few shares on the Nasdaq.
Travel-related stocks like Travelocity and Expedia
sold off in the wake of the plane crash. Airport security stocks rose, led by InVision
and Visionics
.
Ciena rose 1.65 to 18.83 after preannouncing better than expected results, but the company also announced a $1.7 billion goodwill write off, and analysts said the stock remains expensive.
Microsoft climbed .58 to 65.79 after announcing that 7 million copies of Windows XP have sold in two weeks.
Security stocks were strong, led by Check Point and Internet Security
, on positive analyst comments.
Some technical comments on the market: Note: We include charts in the technical market commentary. If you can’t get the charts via the e-mail newsletter version, try this link: http://www.afterhourstrading.com/column.html
Four consecutive reversal candlesticks on the Dow and S&P: The bulls sure are putting up a fight, but the market looks like it should begin a pullback here. The one thing that makes us think it may not be a strong correction is that the put-call ratio is quick to spike on any pullback, providing plenty of short-covering fuel to keep the rally alive. It seems like it may take some more upside to lull traders into complacency. The one big negative here is the Nasdaq internals; new lows exceeded new highs today and were barely above breakeven at their best levels in this rally. In the January and April-May rallies, new highs exceeded new lows by 100-200 issues. That is one sign that support for the rally could be eroding. For the Nasdaq (first chart), support is 1820 and 1780, and resistance is 1850-1860. The uptrend line at 1700 or so is critical support, and we expect that the 1934-1970 level will cap this rally, if it can get that high. For the Dow (second chart), resistance is 9608 and then 9721-9800, and support is 9480-9520, 9408, and then 9275-9300. On the S&P (third chart), resistance is 1123-1126, and support is 1110, 1098 and 1085-1090.
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