Stocks sold off Friday on another steep drop in consumer prices and comments by Fed Chairman Alan Greenspan that significant economic risks remain.
The ISDEX http://www.wsrn.com/apps/ISDEX/ fell 3 to 194, and the Nasdaq lost 24 to 2022. The S&P 500 fell 10 to 1145, and the Dow lost 80 to 9987. Volume declined to 1.2 billion shares on the NYSE, and 1.62 billion on the Nasdaq. Decliners led by 18 to 13 on the NYSE and 21 to 15 on the Nasdaq.
Producer prices recorded another steep drop, and Greenspan said the economic picture is mixed, significant risks remain to the economy, and the lack of pricing power is a concern. In short, nothing of the bullish comments traders were hoping for.
each rose 4% after topping estimates.
plunged 23% after missing its numbers.
fell 4% on a Business Week story that questioned the company’s accounting.
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 S&P 500 (first two charts) gave two signs of a breakdown today: the index broke a strong lower trendline at 1150, and closed the week back below its September 2000 downtrend line. The 1150-1155 level could be tough resistance next week. First support is 1135-1140. The S&P 100 (third chart) is sitting right on critical support at 585. 600 remains the resistance for the market to beat. The Nasdaq (fourth and fifth charts) is flirting with a breakdown at 2020 and may be probing below the neckline of a head-and-shoulders top in the 60-minute chart, with downside potential to 1940. 2000-2010 is important support. The Dow (sixth chart) has support in the 9800-9950 range, and 10,100 is first strong resistance. One last comment on the Investors Intelligence numbers earlier this week: the market has in the past peaked when the percentage of bears has fallen below 23%, as happened this week. Previous readings that low occurred in July 2001 and July 1998.
Special report: For a free introduction to technical chart patterns, visit http://www.internetstockreport.com/guest/article/0,1785,2571_500051,00.html.