On the 13th anniversary of the 1987 stock market crash, stocks soared on better-than-expected earnings from Microsoft. eBay and Commerce One beat earnings estimates after the close.
Wednesday’s steep plunge and recovery seemed a distant memory. The ISDEX surged 47 to 655, and the Nasdaq soared 247 to 3418, both gains of almost 8%. The S&P 500 climbed 46 to 1388, and the Dow rose 167 to 10,142. Volume declined to 1.3 billion shares on the NYSE and 2.33 billion on the Nasdaq. Advancers led by 19 to 9 on the NYSE and 28 to 11 on the Nasdaq. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our after hours trading site.
eBay soared 7 to 64 after hours and Commerce One
rose 4 to 68 after both beat estimates by 3 cents, eBay with 4-cent earnings and Commerce One with a 9-cent loss.
During the day, Ariba rose 5 1/16 to 132 1/8 after reporting break-even results that beat estimates by 5 cents. The only possible negative in the report was that deferred revenue growth slowed from previous quarters, from about 80% to 30%. i2
gained 3 to 182, shaking off rumors of an impending negative analyst report on the company.
America Online lost .91 to 46 despite beating 13-cent earnings estimates by a penny. Merrill Lynch analyst Henry Blodget said he couldn’t raise estimates on the company for the first time in years because of a flat advertising backlog and a decline in deferred revenue, both due to the difficult dot-com environment.
90% of ISDEX issues traded higher, led by E*Trade , which rose 3 1/4 to 14 11/16 after beating estimates by 2 cents with 2-cent earnings. BroadVision
climbed 1 3/4 to 26 1/2 after 5-cent earnings beat estimates by a penny. Phone.com
surged 16 5/16 to 100 after it and merger partner Software.com
blew away estimates. Broadcom
advanced 24 3/4 to 234 1/4 after its 30-cent earnings beat estimates by 6 cents.
Akamai soared 12 9/16 to 52 15/16 after beating estimates by 7 cents with a 60-cent loss.
Efficient Networks soared 9 to 37 1/2 after beating estimates by 9 cents with 10-cent earnings. Avanex
soared 28 1/2 to 118 1/2 on better-than-expected earnings. But Avici Systems
slipped 5 3/4 to 66 1/4 on a better-than-expected loss. Extreme Networks
, off 12 5/16 to 94 13/16, and Tut Systems
, down 6 3/16 to 31 1/4, both beat earnings estimates.
Multex.com gained 1 1/8 to 13 on its first profitable quarter.
Webvan slipped 5/16 to 1 1/4 on a Prudential Sell rating, based on cash burn concerns and the fact the company’s Oakland facility is only operating at 30% capacity in a very Web-savvy area. Women.com
dropped 5/16 to 1 7/16 on an earnings warning.
Allaire slipped 1/4 to 6 1/2 after meeting lowered estimates.
Some technical comments on the market: Note: We are now including charts with the technical market commentary; just click on the links in the story below to go to them. If you have trouble accessing the charts via the e-mail newsletter version, try this link: http://www.afterhourstrading.com/column.html
We got our strong finish; it appears that a bottom of some significance is in, particularly on the Nasdaq. First, one last look at yesterday’s action. We mentioned significant positive divergences in favor of techno
logy and Internet stocks. Here’s what we meant: at least 4 or 5 technical indicators such as MACD made higher lows when the Nasdaq made a lower low than it did last week. Look at the indicators in the bottom of this chart to see what we meant; at least two other indicators also made positive divergences. Also, the S&P appears to have filled a gap from October 1999 yesterday at about 1300. Interesting that the Nasdaq’s gap from that same day at 2900 has yet to be filled, probably because it was on a breakout to new highs. The negatives yesterday were the weak finish and lousy market internals; no divergences there.
The Nasdaq cleared its September downtrend line at about 3400, and has room to as high as 3800. Major resistance could be found at 3500, around the August 3521 bottom and the 38% Fibonacci level from the 4259 to 3026 decline (3094). To the downside, the triple bottom around 3050 (3042, 3054 and 3026) is critical support.
The S&P 500 is back above its 1994 logarithmic trendline at about 1350, a very important level. A close below 1323, or 2% below the 1994 trendline, would be a big negative. The S&P is also back above its September downtrend line at about 1380. It closed just below the 38% retracement level of 1391. 1400, and then 1420, where the index broke down recently, could also pose some resistance.
The ISDEX is once again back above its September downtrend line around 625. The index also took out 650 resistance; next up is 700. The Dow held its 1994 linear trendline with about 100 points to spare yesterday. To the upside, the index needs to take out its September downtrend line around 10,200 to have any room to run. The Dow looks weaker than the other indexes, and we would not rule out another trip to the 9700 area in the weeks or months ahead. The Nasdaq looks strong at 3000.
