Internet stocks led the market higher on Thursday, as rumors that Intel may issue another earnings warning held back tech stocks.
The ISDEX http://www.wsrn.com/apps/ISDEX/
rose 9 to 382, and the Nasdaq climbed 18 to 2557. The S&P 500 added 5 to 1334, and the Dow gained 65 to 10,868. Volume declined to 1.02 billion shares on the NYSE, but rose to 2.2 billion on the Nasdaq. Advancers led by 20 to 8 on the NYSE and 25 to 14 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.
gained 2 3/16 to 15 1/2 on news of an alliance with Intel
, which fell 1 11/16 to 30 7/8 on rumors that it will issue an earnings warning.
rose 2 1/4 to 37 1/2 after the company announced its first national television advertising campaign.
An earnings warning from F5 Networks
, off 2 5/8 to 11 1/8, rippled through the infrastructure space. Inktomi
, down 2 1/4 to 20 1/16, and CacheFlow
, off 10 1/2 to 20 7/8, fell on the news. Radware
initially fell on the news, then recovered to trade up 2 11/16 to 19 3/4 after saying its quarter is on track. Foundry
, which had warned previously, slipped 3/4 to 14 7/8.
rose 4 5/16 to 35 1/4 after saying that business remains strong. The stock had fallen on Network Associates’
warning yesterday. CheckPoint
regained 4 1/4 to 139 3/8, and Internet Security
recovered 6 17/64 to 84 3/4.
tacked on 7/16 to 17 5/16 after Janney Montgomery Scott upgraded the stock from Sell to Hold on somewhat better than expected holiday sales.
gave back 5/8 to 8 15/32 a day after soaring on optimism of an expanded alliance with American Express.
Some technical comments on the market: Note: We are now including 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
The Nasdaq 100 could be forming a rising wedge or bear pennant here (see first chart). At the least, it’s hugging the lower end of its rising channel, so a lot of early strength appears to have gone out of the rally. Also, the index ran into resistance at 2500, a previous support level, and underperformed the broader Nasdaq the rest of the day, barely finishing on the plus side. So if it’s a bear pennant, how low could the index be headed? If we measure the “pole” from the previous consolidation at 2500, we could be headed for a retest of the lows. If we measure from the previous large consolidation at 3000, the picture looks a lot worse. We’ll pick the rosier scenario, given the strong support of the 1990 trendline at 2300 on the Nasdaq. One big positive is that breadth on the NYSE and the Nasdaq was stellar for a modest up day. Given the weakness in the big-cap Nasdaq 100, it could be the beginning of the outperformance of mid- and small-cap stocks that traditionally occurs in January. The trading days before and after New Year’s are historically up days; let’s hope the pattern holds. The Nasdaq needs to gain about 3% tomorrow to avoid having its worst year ever.
The S&P 100 could also be forming a bear penn
ant or rising wedge, and looks very similar to the Nasdaq 100. A retest of the 650 level could be in store.
The Dow continues to outperform. It is approaching critical 10,900 resistance here, and may have already broken a downtrend line. However, the index is becoming overbought and is due for a pullback. A clean break of 10,900 would likely carry the index to 11,500, with the caveat that it could face resistance at 11,000, 11,200 and 11,400.
Special report: For a free introduction to technical chart patterns and an overview of this year’s action in the stock market, visit http://www.internetstockreport.com/guest/article/0,1785,2571_500051,00.html.