Internet stocks managed to post a modest gain on Monday despite a big drop in Yahoo on negative comments from Lehman Brothers.
Through mid-day the ISDEX
added 3 to 814, and the Nasdaq rose 54 to
4097. The S&P 500 bolted 17 to 1523, and the Dow gained 116 to 11,308. Volume declined
to 315 million shares on the NYSE and 615 million on the Nasdaq. Advancers led 14 to
11 on the NYSE and 19 to 16 on the Nasdaq. For earnings reports, visit our
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lost 8 3/4 to 125 1/2 on Lehman Brothers comments that the company continues to face a tough advertising environment, and that the company’s stock price could suffer if third quarter revenues come in light. The firm rates Yahoo a Neutral.
But the news had surprisingly little effect on other Internet stocks. Advertising stocks were mixed after strong gains on Friday. DoubleClick
slipped 9/16 to 41 1/4 and 24/7 Media
lost 1 to 15 9/16. But Engage
gained 1 3/16 to 12 3/8.
, another advertising-driven company, gained 1 1/16 to 26 3/16 on a USB Piper Jaffray Strong Buy rating and $51 price target. The firm believes AskJeeves could exceed estimates for the third quarter due to a strong showing in corporate services.
gained 4 15/16 to 69 3/16 on a Goldman Sachs Trading Buy recommendation and $100 price target. But i2
and Commerce One
pulled back to their breakout points from Friday. i2 was off 4 1/2 to 162 and Commerce One lost 1 5/16 to 52 9/16.
soared 5 1/16 to 17 3/16 on news that it will be acquired for 17 3/4 in cash by Sabre Holdings
, which owns 70% of Travelocity
gained 7/8 to 2 13/16 on news of an expanded alliance with America Online
rose 3 15/16 to 60 3/16 on Buy ratings from Chase H&Q and USB Piper Jaffray. divine interVentures
gained 7/16 to 7 1/4 on a Bear Stearns Buy rating and $14 price target.
gained 1 to 4 5/16 on a Fahnestock Strong Buy rating and $9 price target.
added 1 5/8 to 90 1/2 on a First Analysis Strong Buy rating and $200 price target.
Some technical comments on the market: Surprising strength in the market today, especially considering the topping signals on the major indexes on Friday. Volume is low for a breakout, however, and indicators on the indexes are overbought. That said, the S&P 500 is just a few points from its all-time closing high (1527.46). If it can close above that number and keep going, that would be a real positive. Also, the index may have negated a bearish rising wedge this morning, another positive. The Dow is on track for its highest close since January’s 11,723 all-time high, if it can close above the April high of 11,287. Above 11,300, the Dow faces resistance at 11,400. Before we get too excited, however, don’t forget that the S&P and the Nasdaq closed at new all-time highs in March while the Dow did not, and we all know what happened in April.
We still have those nagging rising wedges on the Nasdaq and Nasdaq 100, and neither index has come close to challenging the upper boundary of its respective rising wedge today. The Nasdaq continues to struggle with its 50% retracement level of 4087 and its downtrend line. The lower boundary of those wedges are at about 3975 on the Nasdaq and 3850 on the Nasdaq 100. Important support on the Dow and S&P is at 11,
150 and 1500, respectively. The Dow needs to stay above the 10,950 area to preserve the upside breakout of the bearish diamond formation. The ISDEX is also forming a rising wedge here, and ran right up against the lower boundary of a previous broken rising wedge last week. A break much below 790 on the ISDEX would just about break the rising wedge. Support on the ISDEX is at 693-700, 650 and 600.