Technology and Internet stocks remained under pressure on Tuesday, weighed down by negative analyst comments on Yahoo.
fell 20 to 457, a new yearly low, and the Nasdaq slipped 4 to 2871. The S&P 500 climbed 4 to 1347, and the Dow added 31 to 10,494. Volume rose to 1.12 billion shares on the NYSE and 1.74 billion shares on the Nasdaq. Decliners led by 14 to 13 the NYSE and 24 to 14 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.
plunged 6 1/2 to 42 3/8 after Morgan Stanley Dean Witter analyst Mary Meeker said the company has a 30% probability of an earnings miss over the next three quarters. The company’s problem is a lack of additional revenue streams, she said. Merrill Lynch also said the company could experience a tough winter, but should be a long-term survivor. Merrill analyst Henry Blodget called the Internet shakeout “the end of the beginning,” but predicted that a few companies will survive, among them Yahoo, eBay
, America Online
, and Amazon.com
. He echoed comments that eBay’s business appears to be slowing.
Blodget also made positive comments about Openwave
, off 8 to 71 3/4, the merged entity of Phone.com and Software.com. But the stock declined after issuing guidance that was lower than estimates.
plummeted 1 1/2 to 1 9/16 on news that it will need a $50 million cash infusion to survive.
, up 1/8 to 35 3/8, gave infrastructure stocks a boost when it confirmed that its quarter is on track. Sycamore Networks
rose 1/2 to 58 13/16 after Wit SoundView added the stock to its Focus List, replacing Nortel.
B2B stocks were mixed. Commerce One
slipped 1 1/2 to 38 3/4, undercutting 39 support. Ariba
recouped 4 3/8 to 71 3/4. The stock faces major resistance at 83 1/2.
slipped 3 1/8 to 127 after settling a trade secret lawsuit with Intel
dropped 4 5/8 to 19 5/16 on a Goldman Sachs downgrade.
, off 15/16 to 11 5/8, reached an agreement to combine with the USA Networks
subsidiary Ticketmaster. USAI’s stake in TMCS will increase from 49% to 68%.
lost another 11 1/8 to 93 1/2, extending its slide after Register.com
and Baltimore Technologies
teamed up to offer digital certificates to Register.com customers.
dropped 7 5/8 to 114 1/4. The move fulfills the stock’s minimum downside potential from its breakdown out of a broadening top at 179 1/2 last week. The stock is extremely oversold, but could face more downside ahead due to the major reversal pattern.
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The Nasdaq and Nasdaq 100 are so far holding at last week’s lows; the Nasdaq set a slightly lower low (2845), while the Nasdaq 100 set a slightly higher low (2745). The move completes the minimum expected downside based on the break of the bearish pennants last week. That level also represents a strong support on the Nasdaq (see chart below). Fear remains at a lower level than we would like to see, and buyers have not been rushing in
to buy here, so we’re not convinced that sellers are done just yet. We’ll see what develops from here. The maximum downside based on last week’s breakdown is 2500 (2530-2570 on the Nasdaq).
The ISDEX is barely holding on to its potential broadening bottom. The lower trendline could be redrawn to encompass today’s low of 457, but some damage was done to that line between yesterday and today. 400 should be strong support, if it gets that low. To the upside, there’s a lot of resistance, beginning at 500 and then 560. A break above the top line at 680 would mean a bottom is in, and give the index room to 850 or higher.
We continue to watch the S&P 500’s 1994 logarithmic trendline at 1369, which we closed below for the second time on a weekly basis last week. If we close below that line by more than 2%, or 1335, we may have seen the end of the bull market. The index has repeatedly come close to a major technical breakdown over the last month or so, but has somehow escaped from the abyss each time. The S&P turned up at 1333 today.
The Dow broke a small head and shoulders top yesterday, with downside potential to 10,400 or lower. The index will continue to have a bullish posture as long as it stays above 10,369. First resistance is 10,525-10,550, which has capped advances in the last two days, then 10,600, 10,850 (the old diamond apex), and critical resistance is 11,000, where the index has failed five times.
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