Market Sags On Earnings Woes

It was hard to pick a culprit for Wednesday’s stock market sell-off, there were so many possibilities: Cisco, Lucent and Dell were just a few big names to get hit by bad news.

The ISDEX lost 11 to 240, and the Nasdaq lost 48 to 2121. The S&P 500 dropped 14 to 1241, and the Dow fell 76 to 10,871. Volume rose to 1.14 billion shares on the NYSE, and 1.71 billion on the Nasdaq. Advancers led by a handful of issues on the NYSE, but decliners led 20 to 17 on the Nasdaq. For earnings reports, visit our earnings calendar at and reported earnings at For after hours quotes and news, visit our after hours trading site at

Cisco lost 1.32 to 19.05 on a downbeat conference presentation. Dell dropped .85 to 25.25 on a Dow Jones report that Michael Dell filed to sell 10 million shares. And Lucent’s debt rating was cut to junk status by S&P. And that was just the start of the negative news.

JDS Uniphase , off .84 to 14.27, was the subject of a dismal assessment from Wit SoundView. Scientific Atlanta plunged 5.06 to 44.12 on a Josephthal downgrade.

Micromuse plummeted 10.01 to 33.50 on negative comments from Banc of America.

Loucloud lost .87 to 2.51, a new low, on a lowered outlook and a Goldman Sachs downgrade. Avaya , off 1.64 to 13.36, and CMGI , down .97 to 3.17, just above critical 3 support, both lowered forward guidance.

Check Point dropped 3.40 to 43.50 on rumors of an impending warning. i2 , off 2.73 to 19.21, broke its uptrend and may have also broken a head-and-shoulders top on negative comments from Merrill Lynch (see chart below).

Want some good news? Philip Morris spun off Kraft Foods , the gem of the U.S. food industry, in the second-largest IPO in history. Should you buy the stock? Forget it. At a PE of 30, it’s trading at twice its growth rate.

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:

A breakdown or the start of a new uptrend? The head-and-shoulders tops that were pierced yesterday broke down today on the S&P 500 and the S&P 100 (first two charts), while the Dow (third chart) held its head-and-shoulders neckline but closed below its main uptrend line. However, the S&P indexes held the new uptrend lines formed yesterday, a hopeful sign, but the indexes have no downside for tomorrow. If 1240 breaks on the S&P, it’s likely head for the 1175-1190 area. The Nasdaq (fourth chart) and Nasdaq 100 (fifth chart) continue to hold their head-and-shoulders necklines of 2100 and 1760, but could still be forming bearish rising wedges (the blue lines). For tomorrow, 1240 on the S&P and 2100 and 1760 on the Nasdaqs must hold.

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

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