Stocks Can’t Muster A Rally

Stocks started the day on the downside Tuesday and continued down all day, as accounting concerns continued to take center stage.

The ISDEX http://www.wsrn.com/apps/ISDEX/ fell 6 to 147, and the Nasdaq lost 54 to 1750. The S&P 500 dropped 20 to 1083, and the Dow plunged 157 to 9745. Volume declined to 1.19 billion shares on the NYSE, but rose to 1.74 billion on the Nasdaq. Decliners led 21 to 10 on the NYSE, and 24 to 10 on the Nasdaq.

After the close, TMP fell on a warning, but Agilent rose on better than expected results.

During the day, Cisco slipped after the New York Post compared the company’s relationship with venture firm Sequoia Capital to an Enron partnership.

IBM fell 3 points to close under the century mark despite pledging greater accounting disclosure.

Emulex , until recently one of the strongest of tech stocks, fell 10% despite saying its quarter is strong.

ONI Systems gained 7% on news that it will be acquired by Ciena .

Travelocity surged 30% on a $23 cash offer from Sabre .

Nokia lost 5% on news that it may face a challenge from the Wintel duo Microsoft and Intel .

Internet IPO PayPal gave back 10% of Friday’s strong debut.

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.

Another day, another failed breakout. The S&P (first chart) fell back below its downtrend line today, joining the Nasdaq in a breakout failure, a bearish sign for at least the short-term. For tomorrow, support is 1077-1082, and resistance is 1086 and 1095. The Dow (second chart) held the same line today, so that’s a positive. If that line breaks, the selling could snowball. That line will be at 9700 tomorrow; if it breaks, 9625 is next and then 9500. Resistance is 9800 and 9900. The Nasdaq (third chart) came within a hair of filling a gap from early November at 1745.73. Below that, 1720 seems to be the target for this leg down. Resistance is 1768-1772 and 1790.

Special report: For a free introduction to technical chart patterns, visit http://www.internetstockreport.com/guest/article/0,1785,2571_500051,00.html.