Sell-Off Continues

Stocks sold off again on Monday as investors braced for the start of earnings season.

The ISDEX fell 6 to 187, and the Nasdaq lost 31 to 1990. The S&P 500 fell 7 to 1138, and the Dow lost 96 to 9891. Volume rose to 1.26 billion shares on the NYSE, and 1.79 billion on the Nasdaq. Decliners led by 19 to 12 on the NYSE and 24 to 12 on the Nasdaq.

After the close, Corning warned and E*Trade beat estimates and raised guidance.

During the day, Intel climbed less than 1% on bullish analyst comments. The company kicks off earnings season tomorrow tonight, and is expected to report fourth quarter results of 11 cents a share, down 70% from a year ago. Yahoo reports Wednesday and Microsoft Thursday.

Network Appliance fell 10% on news of heavy insider selling.

Micron rose 1% on a Lehman upgrade.

Ariba rose 5% on a Goldman Sachs upgrade.

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 indexes continue to slice through trendlines and moving averages with ease. The S&P 500 (first chart), S&P 100 (second chart) and the Dow (third chart) all closed below their 50-day moving averages today after failing at their 200-day moving averages recently. For the S&P, support is 1134-1136, and resistance is 1140-1150. For the Dow, support is 9810-9820, and resistance is 9900 and 10,000. The Dow has had six straight down days, matching its longest losing streak in the current rally, and is probably due for a bounce. The Nasdaq (fourth chart) has resistance at 2000-2010, and support at 1970-1980, 1950, and 1931-1940. If the market sells off hard into Intel’s earnings announcement tomorrow night, it could set up a good bounce. It would be even better if that 1931-1940 support were hit, but 50-60 points down is a little much to ask.

Special report: For a free introduction to technical chart patterns, visit,1785,2571_500051,00.html.

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