Retail Sales Jolt Stocks

Weaker than expected retail sales jolted stocks on Wednesday, as investors worried that consumers may be reining in their spending. Chip stocks got hit on downgrades.

The ISDEX fell 4 to 169, and the Nasdaq lost 35 to 1862. The S&P 500 fell 11 to 1154, and the Dow dropped 130 to 10,501. Volume rose to 1.4 billion shares on the NYSE, but declined to 1.7 billion on the Nasdaq. Decliners led 17 to 13 on the NYSE, and 20 to 14 on the Nasdaq.

After the close, Verity rose after topping estimates.

During the day, Lucent fell 12% to close below $5 in heavy trade.

Intel fell 5% on negative comments by JP Morgan .

Comverse fell 17% on a warning.

Microchip , up 1%, CMGI , off 3%, and WebMD , off 4%, all topped estimates. , with a new 5-letter symbol, rose 7% as the company continued to restate earnings.

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 most important level in this market continues to be that upper trendline on the Dow (first chart); whichever way the index breaks from that trendline could lead to a big move. Today’s move wasn’t quite big enough to be called a breakaway from that line; it remains within the range of other days that have whipsawed around that line. The Dow has traded around that line for eight straight days; it should be around 10,600 tomorrow. Support is 10,475, 10,425, and 10,330-10,380. There are really only two levels that matter on the S&P (second chart): 1160 to the upside, and 1140 to the downside. The Nasdaq (third chart) closed the day right on a rising channel line. 1850, 1830 and 1800 are support, and 1880 and 1890-1910 are resistance. The SOX (fourth chart), the semiconductor index, pierced critical support at 580 today; below that, 550 is next strong support.




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