Stocks End The Day Mixed

Stocks closed mixed on Thursday, as investors looked past worse than expected GDP and manufacturing data to the likelihood of another Fed rate cut next week.

The Nasdaq rose 2 to 1329, buoyed by the first quarterly gain in business investment in two years. The S&P 500 slipped 4 to 885, and the Dow lost 30 to 8397. Volume rose to 1.53 billion shares on the NYSE, and 1.75 billion on the Nasdaq. Advancers led 18 to 14 on the NYSE, and 17 to 15 on the Nasdaq. Downside volume was 57% on the NYSE, but only 37% on the Nasdaq.

After the close, it was announced that a court ruling on the Microsoft antitrust case will be released after the close on Friday.

During the day, Microsoft struggled at its 200-day moving average of 53.63, closing at 53.47 before slipping after hours.

EDS rose 9.5% after beating estimates.

eBay gained 1% after reiterating guidance.

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.

The market needs to decide soon whether this is a bullish consolidation at the highs or a distribution top. The lack of selling here is a big plus, as is the quick spike in the equity put-call ratio on any pullback. But negatives include the lack of new highs (46 on the Nasdaq and 34 on the NYSE) and a quick reversal in Investors Intelligence bulls and bears, from 28-43 two weeks ago to 43-28 this week. Critical support remains 8200 on the Dow (first chart below) and 868 on the S&P (second chart), and 1347 on the Nasdaq is turning out to be very tough resistance (see third chart below). Once again, we need to see a move up in the market accompanied by an expansion of volume and new highs for the bullish case. Conversely, a close back below the May downtrend lines for the Dow and S&P would be a bearish sign. 8500 and 8726-8762 are resistance on the Dow, and 911-924 is resistance on the S&P. Support on the Nasdaq is 1300, 1280, 1250, and 1220.

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