Technology and Internet stocks continued to struggle in the wake of Cisco’s earnings miss, but KPMG Consulting managed to crack a tough IPO market.
The ISDEX http://www.wsrn.com/apps/ISDEX/ slipped 5 to 363, and the Nasdaq fell 45 to 2562. The S&P 500 lost 8 to 1332, and the Dow declined 66 to 10,880. Volume declined to 1 billion shares on the NYSE, and 1.8 billion on the Nasdaq. Decliners led 16 to 14 on the NYSE, and 20 to 16 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.
KPMG Consulting , the consulting arm of Big Five accounting firm KPMG LLC, priced at 18, opened at 20 7/16 and hit 24 1/4 before pulling back. The Internet and technology consulting firm had $2 billion in revenues and $28.3 million in net revenues last year, so its size and profitability helped it crack the IPO market. For more on KPMG, visit Alert-IPO.com and ISR’s IPO Tracker.
PurchasePro dropped 3 13/16 to 15 5/16 after Prudential downgraded the stock over lower adoption rates. Prudential also said that a lawsuit filed by an imprisoned money launderer alleging theft of a business idea is likely frivolous, but could hurt investors’ perceptions of the company.
Corvis , up 5/16 to 19 13/16, was rumored to be a takeover target of Cisco
. Corvis also said it sees no slowdown in business.
EMC fell 5.89 to 59.50 on rumors that it suffered a difficult business environment in January. Competitor Network Appliance
traded off 3 1/2 to 35 1/8, but moved back to breakeven when it topped estimates after the close.
Aether Systems , down 6 7/64 to 30 3/4, continued to plunge on concern about the company’s ability to achieve profitability.
FreeMarkets rose 4 3/16 to 23 15/16 after announcing the acquisition of privately held collaborative solutions firm Adexa.
RealNetworks tacked on 1/32 to 8 21/32 after appointing Larry Jacobson president and COO.
Extreme Networks slipped 3/16 to 31 1/2 after trading as high as 35 1/16 after affirming its 2001 outlook.
internet.com , publisher of this Web site, slipped 7/16 to 7 5/8 after matching estimates with a 3-cent fourth-quarter gain. But the company said it expects first-quarter revenues of $15-$17 million, less than analysts’ average estimate of $17.3 million. The company’s full-year guidance was in line with Wall Street estimates.
barnesandnoble.com , off 3/16 to 1 15/16, missed estimates, issued an earnings warning and announced 16% layoffs. NetZero
, down 1/4 to 1 1/32, also missed estimates, as did AskJeeves
, down 5/16 to 2 7/16.
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 and Nasdaq 100 ran into resistance at their lower rising channel boundaries broken yesterday (first and second charts). Unless the indexes can reclaim those broken lines, they could face more downside ahead. The Nasdaq
100 also ran into resistance at its September downtrend line (the third chart). To the downside, the Nasdaq’s September downtrend line (fourth chart), which that index is still above, provided support yesterday. It’s around 2550 today. 2572, reached again today, represents a 50% retracement of the 2251-2892 run-up; the next major Fibonacci level is 2496, the 61.8% retracement level. The Nasdaq is trapped in a narrow range here, and will have to break one way or the other soon. There are some positive signs here, such as the falling wedges or bear pennants in the first two Nasdaq charts, and others that we will get to in a moment.
The Nasdaq and Nasdaq 100 could be forming much larger inverse head and shoulders bottoms here – if the indexes can turn up soon. Taking out those necklines could send the indexes well above 3000, but these are purely speculative observations at this point.
The S&P 500 may well provide critical support for the market. The lower rising channel boundary around 1325 could provide a cushion for the market. A secondary support line, that gray line, stopped the selling yesterday.
The Dow continues to struggle at 11,000 resistance. A close above 11,007 would be bullish under Dow Theory, the oldest school of technical analysis, particularly if the Dow Transports can stay above 3000; the Trannies continue to hold above that level. But the 11,000 level has been one tough obstacle for the Industrials, reflecting its importance to the health of the market and the economy as a whole. To the downside, we expect that lower trendline at about 10,700-10,750 to hold, if the Dow gets that low.
Special report: For a free introduction to technical chart patterns and an overview of last year’s action in the stock market, visit http://www.internetstockreport.com/guest/article/0,1785,2571_500051,00.html.
