Internet stocks outperformed the broader market on Tuesday, as traders shook off downgrades to Amazon.com and Yahoo to send the sector 5% higher. Yahoo kicks off earnings season tomorrow night.
The ISDEX http://www.wsrn.com/apps/ISDEX/
rose 17 to 336, and the Nasdaq climbed 45 to 2441. The S&P 500 added 4 to 1300, and the Dow lost 48 to 10,572. Volume rose to 1.2 billion shares on the NYSE and 2 billion on the Nasdaq. Advancers led by 16 to 12 on the NYSE, and 22 to 13 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.
B2B leader i2 Technologies
preannounced better than expected revenues, but the stock slipped 7/16 to 41 1/2 after trading as high as 46 3/16 on the news. i2 may have pushed some revenues out to the first quarter in anticipation of an IT spending slowdown, analysts said. Ariba
slipped 1/8 to 36 15/16, 4 points off its high, and Commerce One
tacked on 1 5/16 to 19 5/16.
announced that revenues would exceed $960 million, at the low end of the $950 million-$1.05 billion range expected by analysts. The stock rose 1 7/16 to 16 3/8 despite analyst downgrades on revenue and margin concerns.
Analysts also downgraded Yahoo
ahead of its earnings report tomorrow night, but the stock rose 2 5/8 to 29 13/16. For the first time, Yahoo’s whisper number (12 cents) is lower than the official estimate (13 cents).
surged 2 13/16 to 33 7/16 on a Prudential Strong Buy rating and $125 price target, after eBay announced the acquisition of South Korea’s Internet Auction Co.
rose 3 to 24 1/4 after NBC Internet
said it will use TIBCO’s portal technology to deliver stock quotes and market news.
The parade of earnings warnings continued; about 600 companies have warned for the fourth quarter so far, according to First Call. Webvan
, up 1/32 to 1/2, Open Market
, up 3/16 to 1 5/8, and Quokka Sports
, down 1/8 to 1/2, all warned.
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 left an opening gap at 2396 this morning; we suspect that may fill before the index turns much higher. The rule of thumb is that gaps occurring within patterns or trading ranges tend to fill within two or three days, but that breakout gaps do not need to fill until the trend has changed, if ever. However, that opening gap may have formed an island reversal (see arrows on first chart), giving the index upside potential to 2650, or to the top of a new up channel. Pretty lackadaisical action today. While the weakness in the Dow is a concern, sellers don’t seem to have the conviction they once had. The Nasdaq and Nasdaq 100 seem to be forming new rising channels here:
The S&P 100 is forming a strong lower support line here (first chart), while the S&P 500 is forming a large trading range between 1277 and 1350 (second chart). A break of 1350 could carry the S&P
The ISDEX is also setting up a wide trading range, between 300 and 385. A break of 385 could carry the Nets to 470.
The Dow is looking weaker than the Nasdaq and S&P here; it is the only index trading below the level where the Fed cut interest rates (10,600), a level that was also strong support on the index. Critical support on the Dow is 10,300, while a close above 11,007 would confirm a new bull market under Dow Theory.
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