Technology and Internet stocks continued to hit new yearly lows on Wednesday.
The broader market was pressured by a ruling that hand recounts in Florida will count in the presidential election, giving hope to the Gore camp. But then a ruling shortly after 1 p.m. went against Gore, rallying the market.
The ISDEX fell 25 to 432, and the Nasdaq dropped 112 to 2758. The S&P 500 lost 24 to 1323, and the Dow fell 106 to 10,387. Volume declined to 457 million shares on the NYSE, but surged to 892 million shares on the Nasdaq. Decliners led by 18 to 7 the NYSE and 29 to 6 on the Nasdaq. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our after hours trading site.
Institutional favorites led to the downside on high volume, an indication that professional money managers were joining in the selling. Aether Systems , off 15 1/2 to 65 1/2, and Openwave
, down 18 1/8 to 50 3/8, plunged on news that NTT DoCoMo had purchased a 20% stake in AT&T Wireless
, a move that analysts said could threaten the companies’ business with AWE. Research in Motion
plunged 11 15/16 to 73 5/8, and Handspring
dropped 6 5/8 to 55 7/8.
CacheFlow plummeted 30 9/16 to 46 1/4 after its sequential growth slowed from 75% to 45%. Inktomi
dropped 7 1/8 to 29 1/8, and Network Appliance
lost 5 to 56.
Portal Software cratered 12 1/16 to 6 9/16 after it beat estimates, but revenues came in light. There was also concern about margins and North American business. Four analysts downgraded the stock.
NetCreations slipped 15/32 to 5 17/32 on an earnings warning.
Finisar rose 5 1/4 to 30 15/16 after beating estimates and isssuing a strong outlook.
Yahoo , off 3 1/8 to 38 9/16, and eBay
, down 1 7/16 to 30 1/8, continued to hit new yearly lows. Yahoo is now 85% off its 250 high.
B2B stocks were again cast aside. Commerce One dropped 5 3/4 to 33 1/4; its yearly low is 29. Ariba
lost 3 11/16 to 68 9/16.
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A stunning day in the markets, and so far, only the Dow is looking positive. To begin with, the Nasdaq broke its strong support at about 2850, and in the process took out another important support, 2799, the 62% retracement of the 1357-5132 run-up. A sign that the market’s amazing top could be breaking down and the long-term trend turning bearish. We’re not sure if it’s enough capitulation to call a bottom. Fear remains at a lower level than we would like to see, and the volatility index (VIX) looks poised to break out, a contrary indicator. The maximum downside based on last week’s breakdown is 2500 (2530-2570 on the Nasdaq).
The ISDEX broke down today, below its lower trendline, a move that was signaled by the damage done to that line yesterday. Next strong support is in the 375-400 area, a level we hope we don’t see. To the upside, there’s a lot of resistance, beginning at 500 and then 560.
The S&P 500 is in danger of breaking its 1994 logarithmic trendline at 1369 by more than 2%, or 1335. A close bel
ow 1330 would take out that line and recent support, and confirm the Nasdaq’s bearish development.
The Dow looks great. So far. The index is holding above 10,380, a bullish sign. Here’s why: those three big green candlesticks in late October/early November were a bullish sign, called three white soldiers (essentially, three strong up days, each starting where the previous day left off, forming solid candlesticks). It’s a pretty reliable bullish pattern, and if it can hold, just might be enough to rescue this market. We hope.
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