Internet and technology stocks barely finished positive on Tuesday, held back by weakness in blue chip issues.
The ISDEX gained 5 to 752, and the Nasdaq added 2 to 3851. The S&P 500 fell 7 to 1484, while the Dow dropped 109 to 11,067. Volume rose about 10%, to 895 million on the NYSE and 1.35 billion on the Nasdaq. Decliners led 16 to 11 on the NYSE and 21 to 18 on the Nasdaq. Retailers were weak, and the price of oil rose to a 10-year high. The big economic report for the week is tomorrow’s Consumer Price Index, which is expected to show a 0.1% gain and a 0.2% rise in the core CPI. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our new after hours trading site.
After the close, Lycos reported fourth quarter earnings of 12 cents a share, beating estimates by 4 cents. Revenues rose 89% to $87.9 million. But the stock slipped a point in after hours trading after losing 9/16 to 57 15/16 in the regular session. The company expects to merge with Terra Networks in October.
eBay bolted 3 25/32 to 51 31/32 after CEO Meg Whitman gave the keynote address Monday night at Pacific Crest’s E.Conference.
Priceline.com gained 3/4 to 25 5/16. In an SEC filing, the company boosted its recently reported second-quarter fee-based revenues from $22.9 million to $25.7 million.
Critical Path gained 3 5/16 to 50 5/16 on positive comments from Wit SoundView and Lehman Brothers. The stock had sold off on concern about the pending Phone.com/Software.com merger.
Akamai gained 4 3/16 to 75 9/16 on a Robert W. Baird Outperform rating and $82 price target.
Register.com gained 1 13/16 to 15 3/4 on a Banc of America Strong Buy rating and $40 price target. The firm expects RCOM to become profitable in the fourth quarter.
Red Hat gained 2 5/16 to 24 1/8 on news of alliances with IBM and Motorola.
HearMe soared 2 23/32 to 6 31/32 after Qualcomm said it will integrate the company’s voice communications technology in Qualcomm’s Eudora e-mail technology.
pcOrder.com gained 3/4 to 5 5/8 on news of a million-share stock buyback.
Network Appliance beat estimates by a penny with 9-cent earnings, but the stock fell 5 13/16 to 84 15/16 on backlog concerns.
Sonus Networks gained 12 7/16 to 210 7/16 after announcing a 3-for-1 stock split.
Digital Think bolted 6 3/8 to 41 on a Goldman Sachs Trading Buy rating and $50 6-month price target.
USinternetworking gained 17/32 to 12 9/32 on a Lehman Brothers Buy rating. Interliant
, which received an Outperform rating, slipped 1/4 to 14 7/8.
Verio gained 3/16 to 59 7/16 after beating estimates by a penny with a $1 per share loss. President Clinton has until Aug. 29 to sign off on the company’s merger with Japan’s NTT. The FBI signed off on the deal recently, but The Washington Post reported that federal officials still have some national security concerns about the deal.
i2 fell 6 3/4 to 147 7/8, negating yesterday’s breakout above 150. The stock’s advance was stopped by a higher resistance line at 155.
Value America continued to be halted at 23/32 after the online retailer filed for Chapter 11 bankruptcy. Nasdaq said it is waiting for more information from the company before reopening trading. The company is discontinuing its e-tailing operations and reducing staff, and will focus instead on its electronic services business. For more on the story, click
here.
Portal Software slipped 1/8 to 50 3/4. The stock fell 10% yesterday on concern about the company’s earnings, which will be reported on Thursday.
Some technical comments on the market: The Dow needs to stay above the 10,950-10,975 area to preserve the upside breakout of the diamond formation. As we said yesterday, the breakout came on volume that was too low for comfort, and technical indicators on the index were overbought. Today’s pullback is resolving some of that, but it is disconcerting that volume was up substantially on the downside move. Not a lot to like about the breakout. Resistance is just under 11,200. Home Depot disappointed analysts today with in-line earnings, and Hewlett-Packard reports earnings tomorrow after the close. The Nasdaq appears to be stuck in a narrowing trading range, and has yet to establish firm direction either way. The index may be forming a bearish flag pattern in the daily chart since bottoming at 3521 recently, giving the index potential for more downside, as much as 600 points. A break below 3700 would be a warning sign. The index climbed above 3800 resistance yesterday, and next up is the 50-day moving average at 3917 and the 200-day moving average at 3936. However, we would point out that the index never had a high-volume follow-through day to confirm its recent reversal, a negative sign. The Dow and S&P barely met the minimum requirements for follow-through days. The ISDEX also may be forming a bearish flag pattern here, signaling potential further downside on that index. Key resistance is now around 790, the lower boundary of a broken bearish rising wedge. Support on the ISDEX is at 693-700, 650 and 600; a break below 700 would just about break the bearish flag pattern. The S&P barely moved above 1480-1490 resistance yesterday, which should now become support if the index is to build on these gains. Below that, support can be found at 1450-1460 and 1434-1440. Critical support on the S&P is 1390, the index’s October 1998 uptrend line. The New York Stock Exchange quietly made a new high yesterday, but the move came on very low volume, and the index pulled back today on rising volume. Still, the strength in secondary issues is a plus.
