Stocks Fall On Jobs Report

May 4, 2002

A weaker than expected employment report for April sent stocks sprawling on Friday.

The ISDEX http://www.wsrn.com/apps/ISDEX/ fell 2 to 120, and the Nasdaq lost 31 to 1613. The S&P 500 dropped 11 to 1073, and the Dow fell 85 to 10,006. Volume declined to 1.3 billion shares on the NYSE, and 1.98 billion on the Nasdaq. Advancers led 16 to 15 on the NYSE, but decliners led 18 to 15 on the Nasdaq.

Avant slipped 3% despite beating estimates, but Sapient plunged 39% after missing estimates.

Sun Microsystems finally bounced, up 5% on the day, but Oracle continued to hit new 52-week lows, although it ended the day well off the lows. Goldman Sachs cut estimates on Oracle for 2002 and 2003 to 35-38 cents a share per year.

Cisco lost 3.7% ahead of earnings on Tuesday.

Microsoft closed below 50 and is just two points above its September low.

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 Biotech index (first chart) took out the September lows today. The SOX (second chart), the semiconductor index, broke 500 support, a critical level. The Nasdaq 100 (third chart) is just 100 points from its September lows. And the Nasdaq (fourth chart) closed right at its gap down on September 17 (1613) and below its April 2001 closing low of 1619. Much lower (say below 1600) and the next strong support for the Nasdaq is 1507-1528. Resistance is 1640 and 1696. The S&P 500 (fifth chart) continues to hold well above the critical level of 1052-1054, but it needs to get above 1100-1107 to have room to run. The Dow (sixth chart) has room to run above 10,080. Support is 9925 and 9750. Finally, the Arms index is generating its first buy signal since August 30; that means that the market could generate a significant rally in the next couple of weeks. The signal is controversial – and it’s missing the very high closing TRIN reading that some think the signal requires – but is nonetheless worth paying attention to, particularly if the indexes can take out some real resistance to the upside.