Stocks fell sharply Thursday after Fed Chairman Alan Greenspan told the Senate that last week’s terrorist attacks will likely have a significant short-term effect on the U.S. economy.
The ISDEX http://www.wsrn.com/apps/ISDEX/ dropped 5 to 117, and the Nasdaq lost 56 to 1470. The S&P 500 fell 31 to 984, and the Dow plunged 382 to 8376. Volume declined to 1.94 billion shares on the NYSE, and 2.06 billion on the Nasdaq. Decliners led 26 to 5 on the NYSE, and 29 to 9 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, Liberate topped estimates and raised forward guidance. Palm
and Riverstone
also beat estimates. Tibco
matched estimates, and Jabil
missed by a penny.
During the day, news that the Bass Brothers were selling 135 million shares of Disney at $15 to meet a margin call didn’t help.
But not all stocks went down. Oracle , Nokia
, EMC
and JDS Uniphase
were some that held their ground.
Applied Materials lost 1.63 to 29.49 after announcing that it will cut about 10% of its workforce because of the length of the downturn and the lack of visibility.
BEA Systems and Check Point
fell on Thomas Weisel downgrades.
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
First, some rare good news. The put-call ratio hit 1.24 on the close today, the highest in years. That number is likely skewed due to options expiration tomorrow, but it’s a positive nonetheless because fear is increasing. Even better was the sudden drop in bulls in the Investors Intelligence survey; bears out numbered bulls for the first time since October 1998. A few more bears and that indicator would start to look good. There are some other sentiment indicators that are still negatives for the market, such as the low TRIN (no high reading showing panic yet) and too-high Wall Street equity allocations. But it’s a good sign that investor sentiment is finally getting shaken a little here. One negative for the broad market is that the economically sensitive sectors – the banking index, the cyclicals and the Transports – all hit new lows today, and the banking index had a significant breakdown. Buying will likely show up first in at least the cyclicals; they always buy them first in a bear market, so we’ll keep an eye on that sector. The Dow also set a lower low, but is close to an important level at 8225; below that, 8000 is the next likely target and then 7400 is the October 1998 low. First resistance is 8500 and then 8800. One negative is that the Dow is likely doing some damage to its 1982 bull market trendline here, but the S&P may be holding its 1982 trendline at 984. However, the S&P closed right at its low today, which could lead to further downside. Next support is 920-923, the S&P’s October 1998 low and a likely strong support. To the upside, first resistance is 997, then 1007 and then 1030. Tech stocks look much better than the broad market here. The all-important Philadelphia Semiconductor Index did not make a new low today, and neither did the Nasdaq. Buying in the semis usually precedes buying in the Nasdaq, so we’ll keep an eye on that index. Support on the Nasdaq is 1451, and then 1419-1430. First resistance is 1500 and then 1530. The charts will return tomorrow; sorry for the inconvenience.
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