Stocks Fall On Applied Materials Outlook

Stocks fell Monday after Applied Materials became the latest technology company to warn that a recovery could be a year away.

The ISDEX fell 8 to 212, and the Nasdaq lost 55 to 2029. The S&P 500 dropped 13 to 1202, and the Dow declined 66 to 10,472. Volume declined to 1 billion shares on the NYSE, and 1.4 billion on the Nasdaq. Decliners led 18 to 11 on the NYSE, and 22 to 14 on the Nasdaq. For earnings reports, visit our earnings calendar at and reported earnings at For after hours quotes and news, visit our after hours trading site at

After the close, Novellus topped estimates by a penny at 40 cents a share, but the stock continued to slide after hours after its outlook wasn’t as hopeful as investors had wanted.

During the day, Applied Materials fell 4.36 to 42, and kept falling after hours, after the company backed off its prediction of a late-year recovery and began to talk about mid-2002. Intel lost 1.39 to 28.80 ahead of its earnings announcement Tuesday night.

Openwave fell 2.50 to 19.26 on word that Nokia may delay its GPRS phone by 30 days.

Expedia fell 3.80 to 44.90 despite pre-announcing blow-out earnings of 20-23 cents a share, versus estimates of 9 cents a share. Also, USA Networks announced it is acquiring Microsoft’s stake in Expedia, but MSN and Expedia extended their distribution agreement.

Cisco dropped .94 to 17.80 after Morgan Stanley cut its outlook on the company.

EarthLink climbed .92 on news that the company’s agreement to access the Time Warner Cable network is progressing.

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:

About the only good news today is that volume declined. The Nasdaq (first chart) went a little bit lower than we would like to have seen, taking out 2031 support, the bottom of Thursday’s big white candlestick that marked the big gap up on the Microsoft news. Not a great sign that buyers didn’t come in there with conviction. We’ll see what happens tomorrow. 2028 is the mid-1998 peak on the Nasdaq, so it’s not insignificant support (the Nasdaq closed at 2029 today). Tuesday-Thursday marks a very important turn window. Intel’s and IBM’s earnings announcements Tuesday and Wednesday after the close could be very important for dictating intermediate term direction. The S&P 500 (second chart) took out 1203-1207 support. Critical support is 1187, the bottom of Thursday’s candlestick, and resistance is 1220, a downtrend line that stopped the index today. The Dow (third chart) ran into resistance at 10,570 today, just below the important 10,600 level. The index held 10,450 support, and 10,269 is critical support.

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