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 http://www.wsrn.com/apps/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 http://www.wsrn.com/apps/earnings/internet.xpl and reported earnings at http://www.wsrn.com/apps/earnings/ireported.xpl. For after hours quotes and news, visit our after hours trading site at http://www.afterhourstrading.com.
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: http://www.afterhourstrading.com/column.html
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 http://www.internetstockreport.com/guest/article/0,1785,2571_500051,00.html.