Nortel Networks sent technology stocks sprawling on Wednesday when it reported weaker-than-expected revenues, overshadowing a strong report from Amazon.com.
The ISDEX lost 44 to 606, and the Nasdaq plummeted 190 to 3229. The S&P 500 lost 33 to 1364, and the Dow declined 66 to 10,326. Volume surged to 1.3 billion shares on the NYSE and 2.2 billion on the Nasdaq. Decliners led by 18 to 9 on the NYSE and 27 to 12 on the Nasdaq. The big economic reports for the week are tomorrow’s employment cost index and Friday’s GDP report. Dallas Fed President Robert McTeer said the GDP report could come in much weaker than expected, fueling fears of a sharp economic slowdown. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our after hours trading site.
InfoSpace rose more than a point to 22 after hours after reporting earnings of 3 cents a share, 3 cents better than expected.
During the regular session, Amazon.com rose 2 7/8 to 32 7/16 after beating estimates by 7 cents with a 25-cent loss. Revenues of $638 million trounced estimates of $600-$608 million. AskJeeves
, off 1 7/16 to 10 11/16, also beat estimates, but announced the resignation of CFO Thomas Low. VerticalNet
, down 6 7/8 to 25 3/4, beat estimates by 9 cents with a 20-cent loss.
But it was Nortel’s earnings report that tested the market’s mettle. The stock plummeted 18 3/16 to 45 1/8 after revenues came in at $7.3 billion, at the low end of the $7.3-$7.8 billion range of estimates, and the company forecast slower optical networking growth in 2001. JDS Uniphase
, also strong in the optical space, dropped 24 1/2 to 70 9/16. JDSU reports earnings tomorrow.
CNET surged 3 to 28 11/16 after reporting earnings of 7 cents, 4 cents ahead of estimates. Excite@Home
, off 9/16 to 9 9/16, matched estimates, but guided 4th-quarter estimates lower.
InterNAP slipped 1 15/16 to 16 after beating estimates by 3 cents with a 35-cent loss. Click Commerce
dropped 4 7/8 to 28 despite beating estimates by 4 cents with a 4-cent loss. InterWorld
dropped 7/16 to 2 3/8 after missing estimates by 1 cent with a 41-cent loss. USinternetworking
, off 1 to 2 3/4, beat by 2 cents with a 49-cent loss.
Rhythms , off 31/32 to 2 31/32, beat estimates by 22 cents with a $2.07 loss. Viant
, down 3/8 to 6 1/8, beat estimates by 3 cents, but Razorfish
, off 5/8 to 4 11/16, missed by a penny.
Bluestone Software dropped 2 13/16 to 20 3/8 on news of a merger with Hewlett-Packard
. Fogdog
, off 3/16 to 11/16, will be acquired by Global Sports
for 0.135 GSPT shares. pcOrder.com
fared better, soaring 2 11/16 to 6 1/8 on a $6 3/8 cash offer from Trilogy Software.
Sagent , off 3/8 to 2 3/4, missed earnings by 4 cents with a 24-cent loss. FVC.com
, off 1/4 to 3, matched estimates.
Some technical comments on the market: Note: We are now including charts with the technical market commentary; just click on the links in the story below to go to them. If you have trouble accessing the charts via the e-mail newsletter version, try this link: http://www.afterhourstrading.com/column.html
We said last night that Nortel’s miss was bad news for the m
arket, and that certainly was the case. The Nasdaq sold off on higher volume for the second straight day, a bad sign for a new rally. The Nasdaq struggled repeatedly with its 38% retracement level of 3494, its August bottom of 3521 and its October 1998 trendline. Today, the Nasdaq broke back below its September downtrend line at about 3300. The next possible support is 3175, where the index broke out of a falling wedge. But more ominously, the index may have broken out of a bear flag, signaling a potential retest of 3000, and a possible move to the apex of that falling wedge at 2800. That falling wedge apex at 2800 also coincides with a line across the pre-1999 peaks, which is where the index took off last year.
The S&P 500 cannot close below its 1994 logarithmic trendline at about 1350 by more than 2%, or 1323. The S&P may have broken a bear pennant that could set up a retest of the 1300-1325 range; oddly, it could also be forming a bull pennant, that smaller down-sloping pattern. The ISDEX broke support at 650 today, but found support at 600. The ISDEX’s broken September downtrend line is now at about 575. The Dow failed again at its secondary downtrend line just above 10,400. The index looks better than the others, but it too may have broken out of a bear flag or pennant today, setting up a possible retest of the lows. 10,000 could provide some support.
