The Federal Reserve’s 11th rate cut this year was almost an afterthought on Tuesday, as bulls and bears did battle over differing outlooks from Nokia and Merck.
The ISDEX http://www.wsrn.com/apps/ISDEX/ rose 3 to 190, and the Nasdaq gained 9 to 2001. The S&P 500 slipped 3 to 1136, and the Dow lost 33 to 9888. Volume rose to 1.36 billion shares on the NYSE, and 1.96 billion on the Nasdaq. Decliners led by a few issues on the NYSE, but advancers led 19 to 17 on the Nasdaq.
After the close, Comverse
matched estimates and announced layoffs, and CMGI
missed revenue estimates, warned and restated a previous loss.
During the day, a warning from Merck
undid a blue-chip rally, but a bullish outlook from Nokia
boosted tech stocks. The Fed delivered another quarter-point rate cut, cutting the Fed funds rate to its lowest level since 1961, and the discount rate to its lowest level since 1948.
rose despite lowering its revenue outlook. Xilinx
rose after raising guidance, Engage
soared on a better than expected loss, and Ulticom
slipped on lighter than expected revenues.
slipped on rumors of a tough quarter and a contract loss. PeopleSoft
gained on positive analyst comments.
fell on news that COO Ken Walters is departing.
more than doubled on news of an alliance with IBM
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Tech stocks are still holding up, but the broader market looks awfully close to done here. The Dow (first chart) and S&P (second chart) have no uptrends left from the September lows after today, and both also backtested yesterday’s breakdowns at today’s highs (10,000/1150), which confirms the importance of the breakdown. 9940 on the Dow is the first level to beat tomorrow if the bulls are going to rescue this. Above that, 10,050 is next resistance. 9850-9866 is first support, and 9700 is the first strong support. For the S&P, support is 1125-1134, and resistance is 1142-1143 and 1155. The Nasdaq (third chart) and Nasdaq 100 (fourth chart) are both sitting right above critical support, at about 1990-2000 on the Nasdaq and 1642 and 1665 on the Nasdaq 100. One thing that could prop up the market the rest of the week is Prudential’s $3 billion IPO, which will debut on Thursday. (Ever notice how a certain Wall Street strategist seems to make bullish calls right before an important IPO managed by the same firm?) That would take us up to Friday, which Chris Carolan (The Spiral Calendar) has as an important cycle turn, which he is predicting will be a major top.
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