Oracle Misses, JP Morgan Warns

Oracle and JP Morgan capped a rough day for stocks with a revenue miss and an earnings warning.

The Nasdaq lost 15 to 1259, the S&P 500 slumped 17 to 873, and the Dow fell 172 to 8207. Volume surged to 1.39 billion shares on the NYSE, and 1.5 billion on the Nasdaq. Decliners led 22 to 9 on the NYSE, and 20 to 11 on the Nasdaq.

After the close, Oracle lost 6% after missing revenue estimates and guiding lower. Intuit reaffirmed guidance, and Red Hat matched estimates.

During the day, a strong rally on hope that the Iraq crisis could be resolved peacefully faded on skepticism and news that industrial production ended a 7-month growth streak in August.

EMC , Texas Instruments , Broadcom and Brocade were among the stocks making new 52-week lows.

Microchip rose 11% after raising guidance.

JDA plunged 37% on a warning, and competitor Retek lost 11%.

Lucent closed at $1.00 after spending much of the day below that level.

Some technical comments on the market: Note: To see the charts in the text email newsletter, click on the story link at the top of the newsletter.

The banks (first chart below) may finally break down tomorrow on the JP Morgan warning. A clean break of that head and shoulders neckline would target 670. The rest of the market is clinging by a thread as well: the Dow (second chart), to 8200 support; the Nasdaq (third chart), to 1251 support; and the S&P (fourth chart) to 870-875 support. Next support below those levels is 8050 on the Dow, 854 on the S&P, and 1238 on the Nasdaq. Resistance is 8300 and 8400 on the Dow, 1270 on the Nasdaq, and 890 on the S&P. Not much to say about the SOX, the semiconductor index (fifth chart), which hit another new low today. 243 is the next strong support on that index. There is some good news for the bulls tonight: the equity put-call ratio, which turned us bearish back in August, closed above 1.0 tonight for only the ninth time in the last 5 years (four of those occasions were in the week after the September 11 terrorist attacks). Important bottoms have tended to occur within a week or so of such readings, most recently on July 19, three trading days before the July bottom.






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