Stocks Fall On Warnings, Weak Retail Sales

Earnings warnings from Ciena and Lucent and weaker than expected retail sales sparked a broad market sell-off on Thursday.

The ISDEX http://www.wsrn.com/apps/ISDEX/ dropped 12 to 180, and the Nasdaq plunged 64 to 1946. The S&P 500 fell 17 to 1119, and the Dow lost 128 to 9766. Volume rose to 1.43 billion shares on the NYSE, and 2.07 billion on the Nasdaq. Decliners led 20 to 10 on the NYSE, and 23 to 12 on the Nasdaq.

After the close, Adobe missed estimates and warned, and Oracle missed revenue estimates. Oracle called the quarter its “toughest in a decade.” Both stocks traded lower after hours.

During the day, Ciena and Lucent both fell about 16% on earnings warnings.

Yahoo and TMP Worldwide both fell after Yahoo made a surprise bid for HotJobs , which had previously been slated to merge with TMP.

Macromedia and Macrovision plunged on earnings warnings.

Verity fell despite topping estimates, and Applied Materials fell after announcing another round of layoffs.

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 Nasdaq (first chart) and Nasdaq 100 (second chart) both broke down today, following breakdowns earlier this week by the Dow and S&P. The Nasdaq 100 looks just plain cooked, but the Nasdaq could find substantial support in the 1935 area from its 200-day moving average and a potential lower trendline. The Dow (third chart) has support at 9745, then 9700 and then 9575-9600. First resistance is 9800 and then 9900-9920. The S&P broke 1125 support today, which is now first resistsance. Support is 1117-1118 and then 1112. So far, Chris Carolan’s cycle turn for this week has been very interesting; every major index has broken its September uptrend in that Dec. 10-14 window. Not bad for a call that was made more than two years ago. Watch 1935 on the Nasdaq for tomorrow; that’s the one potential strong support left for the market.

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.