Stocks traded in a narrow range on Tuesday, held back by stronger-than-expected new home sales and weakness in drug stocks.
The ISDEX lost 4 to 802. The Nasdaq rose 9 to 4079. The S&P 500 slipped 3 to 1511, and the Dow lost 31 to 11,221. Volume rose to 340 million shares on the NYSE and 680 million on the Nasdaq. Decliners led 13 to 11 on the NYSE, but advancers led 18 to 17 on the Nasdaq. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our new after hours trading site.
Yahoo continued to struggle a day after losing 12 points on negative comments by Lehman Brothers. PaineWebber came out in defense of the stock, but Yahoo fell to 120 before recovering, up 1/16 to 122 1/8. Merrill Lynch analyst Henry Blodget, who expects only modest growth in revenue this quarter, pointed out the Lehman’s concerns about the state of Internet advertising aren’t new. DoubleClick
gained 5/8 to 40 1/8, but 24/7 Media
lost 7/8 to 14 9/16.
AskJeeves continued to make strides to break away from the Internet advertising model. The stock rose 1 1/2 to 27 1/2 after announcing that First Union will use the company’s question-answering technology to power its Web site.
Excite@Home gained 11/16 to 14 5/8 on news of contracts with AT&T, Cox Communications and Comcast. Also, the company converted 50 million A shares held by AT&T
into B shares, giving AT&T a 25% stake and 74% controlling voting interest in ATHM.
Amazon.com added 3/8 to 39 1/2 after extending its alliance with America Online
and launching a French-language site.
Interwoven gained 1 1/2 to 89 on an alliance with TIBCO Software
, which lost 4 3/8 to 94 1/16.
ClickCommerce rose 1 to 28 11/16 on a USB Piper Jaffray Buy rating and $45 price target. The firm also began coverage of Agile Software
, off 2 to 68 11/16.
Covad climbed 1 3/16 to 17 1/16 on a Goldman Sachs Outperform rating and $24 price target. WebEx
gained 1/2 to 35 1/2, also on a Goldman Sachs Outperform rating.
Aether Systems rose 4 15/16 to 138 3/8 on a Robinson Humphrey Outperform rating and $220 price target.
PlantRX.com gained 7/32 to 25/32 on news of several top-level moves, including naming John McAlpin president and COO. Also, the company will move from San Francisco to Memphis, cutting its cash burn rate in half.
MicroStrategy climbed 1 to 28 1/2 after announcing that it will layoff 234 employees, or 10% of its workforce.
CriticalPath added 3 1/16 to 72 15/16 after announcing a multi-year outsourcing agreement with Circuit City Stores.
Some technical comments on the market: The market is stuck in a narrow range here, bounded by Nasdaq 4100 to the upside and Dow 11,200 and S&P 500 1505 to the downside. We’ll begin with the Nasdaq, which continues to struggle with its 50% retracement level of 4087 and its downtrend line. The Nasdaq may also be forming a head-and-shoulders secondary top here, with two shoulders under 4100 and a head at 4289. And the Nasdaq and Nasdaq 100 continue to rise in bearish rising wedges, with lower boundaries at about 3975 on the Nasdaq and 3850 on the Nasdaq 100. That’s a lot of potent resistance for the Nasdaq to overcome, but a move above 4100 could give the index room to run.
The S&P 500 tested the lower boundary of its rising wedge at 1505 this morning; a break below that level could give the index room to 1425, where the wed
ge began. The Dow tested its old 11,200 resistance this morning and held, so it has some potential to become support. To the upside, if the Dow can close above its April high of 11,287, it could have room to 11,400. The Dow needs to stay above the 10,950 area to preserve the upside breakout of its bearish diamond formation. The ISDEX is also forming a rising wedge here, and ran right up against the lower boundary of a previous broken rising wedge last week. A break much below 790 on the ISDEX would break the rising wedge; the index turned up at 794 this morning. Support on the ISDEX is at 693-700, 650 and 600.
