Stocks shook off weak manufacturing, construction and auto sales data on Tuesday to post big gains, and Dell extended the party after hours by raising estimates.
News that the UN and Iraq had reached an agreement on the return of weapons inspectors sent the rally into high gear, even though the agreement apparently did not meet all U.S. demands.
The Nasdaq soared 41 to 1213, the S&P 500 surged 32 to 847, and the Dow soared 346 to 7938. Volume declined to 1.71 billion shares on the NYSE, but rose to 1.71 billion on the Nasdaq. Advancers led 22 to 10 on the NYSE, and 18 to 14 on the Nasdaq. Upside volume was 79.9% on the NYSE, and 75% on the Nasdaq.
After the close, Dell
surged nearly 5% after raising estimates.
During the day, 5% gainers included Microsoft
rebounded after taking out its October 1998 low of 10.28.
fell 8% on a downgrade, and Network Associates
dropped 10% on a downgrade.
gained 6% on positive analyst comments.
surged after reaffirming guidance.
Storage stocks lagged, with QLogic
registering 3% losses.
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.
A very nice rally today – but straight into resistance. The Dow (first chart below) was the only index to manage a breakout. If it can clear 8012-8051, the bulls could be onto something. Critical support is now 7825. We still favor a wave 4 consolidation before a final wave 5 down, but a move above 8012-8051 would likely change that to a more bullish scenario. One puzzling aspect of today’s rally is the failure of either index to record an 80% upside day, an unusual lack of participation for such a big rally. Will it be a short-lived affair? That’s our favored scenario for now. However, the Nasdaq (second chart) and S&P (third chart) could join the Dow in the breakout of the September downtrend tomorrow. That would set up a test with the critical resistance areas of 1239-1251 and 857-870. Again, if all those levels are taken out, the bulls may be onto something, particularly if 8217-8247, 1270 and 877 are taken out. A failure at those September downtrend lines for the Nasdaq and S&P could lead to new lows sooner than later. Dow 7825 is likely the most important support for tomorrow; a breakout failure there would be a strong bearish sign.
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