Second quarter GDP came in better than expected on Wednesday, but it only served to remind investors that economic growth has skidded to a halt. Sun Microsystems warned after the bell.
The ISDEX http://www.wsrn.com/apps/ISDEX/ fell 4 to 163, and the Nasdaq dropped 21 to 1843. The S&P 500 declined 12 to 1148, and the Dow lost 131 to 10,090. Volume declined to 966 million shares on the NYSE, and 1.4 billion on the Nasdaq. Decliners led 16 to 14 on the NYSE, and 20 to 15 on the Nasdaq. For earnings reports, visit our earnings calendar at http://www.wsrn.com/apps/earnings/internet.xpl and reported earnings at http://www.wsrn.com/apps/earnings/ireported.xpl. For after hours quotes and news, visit our after hours trading site at http://www.afterhourstrading.com.
After the close, Sun fell 80 cents to 12.75 on a dismal outlook. Corning
also warned and announced more layoffs, and Altera
declined on its outlook. But Tech Data
rose on better than expected results and a positive preannouncement.
During the day, news that GDP remained above the flatline in the second quarter only reminded investors of how weak the economy is. Blue chips and financial stocks led the sell-off.
Comverse Technology lost 2.53 to 26.02 after matching lowered estimates and reaffirming forward guidance. But day sales outstanding rose to 117 as the company experienced difficulty collecting.
Gateway rose .19 to 8.79 on news of a restructuring and comments that it expects a sequential improvement in business.
Advanced Micro fell .60 to 14.22 on a negative outlook.
Yahoo lost .93 to 12.09 on Goldman Sachs comments that business remains difficult.
Handspring surged .74 to 2.95 on news that devices integrating GSM voice and GPRS data were ready 6-9 months ahead of schedule.
Ciena rose .10 to 18.37 ahead of its introduction into the S&P 500 after the close.
Priceline fell .21 to 5.52 despite a BusinessWeek Online article that the company could be a takeover candidate.
VeriSign dropped 5.89 to 38.75 on concern that .biz and .info business won’t be good.
Juniper fell 1.30 to 15.40 after Merrill Lynch cut estimates on the company.
Redback slipped .02 to 4.16 despite hiring former Cisco official Kevin DeNuccio as CEO.
Excite@Home’s rose .13 to .52 on news that former White House chief of staff Mack McLarty is interested in investing in the company.
Oracle , off .66 to 13.35, continued to lose ground on news that a top sales official will take a medical leave.
Some technical comments on the market: Note: We include charts in the technical market commentary. If you can’t get the charts via the e-mail newsletter version, try this link: http://www.afterhourstrading.com/column.html
The market looks like it has one more leg down to go before it can generate a reliable bounce (see first two charts below of the Nasdaq and the Dow). The biggest breakdown today belongs to the Dow (third chart) which broke 10,120 support and appears headed for 9950-10,000 support. That 500-point descending triangle points to a move to 9600-9700, and treating it as a consolidation at the bottom of a 1300-point decline implies a retest of the March-April 9100-9400 lows. The NYSE had a similar breakdown today, and the S&P 500 (fourth chart) broke 1153 support and appears headed for a retest of the 1080-1100 March-April lows. 1153-1156 is first resistance on the S&P, and the 10,120-10,220 level is first resistance on the Dow. The Nasdaq (fifth chart) faces resistance at 1860 and 1883, and 1817 is critical support. A move below that level would likely target 1770. The Nasdaq 100, which closed at 1499 today, must hold its 1990 trendline at 1468, or another bear market leg down becomes likely.
Special report: For a free introduction to technical chart patterns and an overview of last year’s action in the stock market, visit http://www.internetstockreport.com/guest/article/0,1785,2571_500051,00.html.
