Stocks rallied on Monday, but on anemic volume, as many traders stayed home in the wake of a huge snowstorm.
The ISDEX http://www.wsrn.com/apps/ISDEX/
rose 1 to 266, and the Nasdaq climbed 25 to 2142. The S&P 500 added 7 to 1241, and the Dow gained 95 to 10,562, as cyclicals were strong for the second straight day. Volume plunged to 925 million shares on the NYSE, and 1.49 billion on the Nasdaq. Advancers led 16 to 14 on the NYSE, but decliners led by a few shares 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.
soared 2 1/2 to 12 1/2 on a Times Of London report that Amazon might form a strategic alliance with Wal-Mart
. Under the alliance, Amazon would handle Wal-Mart’s online strategy and receive in-store presence.
surged 5 1/64 to 58 5/8 after CS First Boston pounded the table on the company, saying the stock is reasonably valued and will not miss its quarter. Cisco
rose 7/8 to 23 1/8 despite lowered estimates from UBS PaineWebber, which also said that it expects telecom equipment growth rates over the next two years to be their lowest since 1993.
fell 3 5/8 to 46 15/16 on news of more competition, this time from idealab-funded New.net.
rose 1 1/4 to 39 1/16 despite becoming the latest chip equipment company to warn. Broadcom
was unchanged at 46 5/16.
fell 1 15/16 to 22 11/16 on a class action suit that claimed the company failed to disclose software difficulties with Nike.
plummeted 10 3/32 to 30 25/32 on a Thomas Weisel downgrade.
Security stocks were weak on rumors that Check Point
, off 4 1/4 to 60 1/8, will warn during a conference call tomorrow morning, but analysts dismissed the rumors. Internet Security
plunged 7 7/16 to 42 3/4.
Some technical comments on the market: Note: We are now including 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
The indexes continue to find support at our critical levels of 10,292 on the Dow, 1214 on the S&P 500 and 2071 on the Nasdaq, but buyers have yet to come in much above those levels. We continue to see signs of early buying pressure, with strength in the semiconductors, cyclicals and Transports, but that confidence has yet to spread to the broader market. It is interesting to note, however, that cyclical issues are usually the first stocks to be bought in a bear market; a possible hint of a turn, but nothing definitive. The Dow must close above 10,650, the S&P above 1275, and the Nasdaq above 2318 for any sort of a bottom to be considered in place.
The Nasdaq may be trying to reform its 1990 logarithmic trendline at 2071 (first chart), a big plus if that level holds. To the upside, a move above its January 31 downtrend line at about 2200 would be the first sign of buying pressure (second chart), and then resistance can be found about every 50 points after that. Note the downtrend lines from September in the third chart; they indicate potential resistance at 2250 and 2350. The Nasdaq formed a gap at the open today at 2117; that gap is likely to fill at some point.
The S&P 500 is running into resistance at 1245-1254. Above that, the index must get back above 1275, the early January low and the September downtrend line (all levels in the chart below). 1214 is critical support on the S&P 500.
The Dow’s must get back above 10,650 on a closing basis to be restored to a positive bias. To the downside, a close below 10,292 could lead to a retest of the index’s lows in the 9600-9700 area, although 10,200 or so could also provide support. The Dow Transports are back above 2900, a good sign. To the upside, the Transports must get back above 3000.
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.