A warning from Nortel sent stocks sharply lower on Wednesday.
The Nasdaq dropped 33 to 1314, the S&P 500 lost 16 to 917, and the Dow fell 130 to 8694. Volume declined to 1.15 billion shares on the NYSE, and 1.35 billion on the Nasdaq. Decliners led 21 to 10 on the NYSE, and 22 to 10 on the Nasdaq.
After the close, Liberate warned, but TriQuint
reaffirmed guidance.
During the day, Nortel fell 15% on a warning.
Yahoo dropped 15% on a secondary offering.
Hewlett-Packard gained fractionally after missing revenue estimates and saying IT spending remains weak, but reaffirming guidance.
Semtech fell 25% on a warning.
Neoware rose 12% to a new high after beating estimates.
Sun fell 6% on negative comments from Goldman Sachs.
Some technical comments on the market: Note: To see the charts in the text email newsletter, click on the internetstockreport.com story link at the top of the newsletter.
The Nasdaq (first chart below) had one ugly breakdown today, a gap over two trendlines. 1290 is first strong support, 1263 is critical support, and 1345-1355 should now be very tough resistance. Also worrisome for the Nasdaq is Dell’s gap back into its down channel (second chart). The S&P (third and fourth charts) should be headed to 897 at a minimum, although 875 and 840-850 look like much stronger support. 912-915 is first support and held nicely today. However, that daily chart sure looks like a bearish rising wedge, including the falling volume; if it’s real, the July lows should be retested and possibly broken. 930 should now be tough resistance. The Dow (fifth chart) has support at 8350, 8200 and 8000, and 8750-8800 should be tough resistance. NYSE downside volume reached 83% today, one potential sign that downside momentum may be picking up, but the VIX, the options volatility index, and the put-call ratio showed some evidence of fear. Not so for investment advisors in the 40-year-old Investors Intelligence survey, which showed one of its biggest reversals in memory, with bulls going from 36% to 45%, and bears going from 40% to 31%. Major bottoms tend to occur with bears above 55%, a reading this bear market has not seen. GDP could be a market-mover tomorrow morning, along with Michigan sentiment and Chicago PMI on Friday.
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