Stocks Battle Back

Stocks battled back from steep losses on Thursday, as fears of terrorist attacks and war between India and Pakistan continued to roil the markets.

The ISDEX declined fractionally to 121, and the Nasdaq gained 7 to 1631. The S&P 500 lost 3 to 1064, and the Dow slipped 11 to 9911. Volume rose to 1.24 billion shares on the NYSE – the third straight decline in rising volume for the NYSE – and 1.56 billion on the Nasdaq. Decliners led 17 to 14 on the NYSE, and 17 to 16 on the Nasdaq.

After the close, Palm fell on a warning.

During the day, Genesis Microchip plunged 28% on negative analyst comments.

PeopleSoft gained 8% after reaffirming guidance.

Internet IPO priced at 13, popped at the open, but then settled back to close at 13.03.

Brocade gained 4% on optimism ahead of an analyst day Monday.

Overture gained 9% on a pact with Alta Vista.

Microsoft rose 1% on reports that the company may be close to settling SEC charges that it managed earnings and revenue growth.

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 biggest support for the market at the moment is 9800 on the Dow (first chart below). Below that level a giant head and shoulders top comes into play with downside potential to 8800. In the daily time frame (second chart below), the Dow looks like it could pop. 10,078 is critical resistance. The S&P 500 (third chart) broke down out of a bear flag today. 1072-1075 now looks like very tough resistance, and 1049 was the recent low on the index. The Nasdaq (fourth chart) has support at 1600 and resistance at 1640 and 1660. And back to the continuing saga of gold versus the U.S. dollar. The HUI (fifth chart), the gold stock index, may be putting in at least a short term top here (however, note three previous bearish evening stars before today’s that didn’t amount to much). The U.S. dollar (sixth chart), on the other hand, looks like it may finally be ready to bounce after breaching the September lows today. The two often move inversely to one another. About the only thing that could save the bulls here is the end-of-the-month/start-of-the-month rally period the next two days, when new money is put to work. There are a number of economic reports between 8:30 and 10 a.m. tomorrow, among them Michigan sentiment, factory orders and Chicago PMI.






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