Stocks Plunge On Jobs Data, Credit Fears

Stocks plunged Friday after employment numbers didn’t come in as weak as hoped, dampening hopes for more aggressive Federal Reserve rate cuts. The jobs report also contained more wage pressures, fueling inflation fears.

The ISDEX fell 32 to 324, and the Nasdaq lost 159 to 2407. The S&P 500 dropped 34 to 1298, and the Dow declined 250 to 10,662. Credit concerns hit financial stocks hard. Volume declined to 1.4 billion shares on the NYSE and 2.1 billion on the Nasdaq. Decliners led by 16 to 12 on the NYSE, and 24 to 14 on the Nasdaq. For earnings reports, visit our earnings calendar at and reported earnings at For after hours quotes and news, visit our after hours trading site at

Cisco plunged 5 1/4 to 36 5/8 after the company surveyed more analysts than it usually does on their expectations for Cisco’s quarter, fueling concerns that the company might warn.

Yahoo slipped 1 5/8 to 27 15/16 after Bear Stearns said it expects Yahoo to meet its 13-cent earnings estimate next Wednesday, but issue cautious forward guidance. In a sign of how much things have changed, Yahoo’s whisper number (12 cents) is lower than the official estimate.

JDS Uniphase , off 5 1/2 to 42 3/8, continued to get hit on earnings concerns.

eToys rose 1/32 to 3/16 despite laying off 70% of its workforce and saying it no longer expect to turn profitable in 2003. The company will run out of money by the end of March.

BackWeb dropped 1 1/8 to 2 29/32 on an earnings warning. Tibco lost 2 3/8 to 33 3/4, and Marimba slipped 3/16 to 4 7/16.

Other companies issuing earnings warnings include: Sapient , which rose 1/16 to 15 1/8 after trading as low as 10 13/16, Copper Mountain , off 1/2 to 4 1/4, , off 3/32 to 31/32, ClickSoftware , down 15/16 to 1 1/8, CyberSource , unchanged at 2 1/8, Keynote Systems , down 3 to 13 15/16, and Delano Technology, , off 2 3/8 to 2 3/8.

eBenX fell 1 3/8 to 5 7/8 on a W.R. Hambrecht downgrade.

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:

It looks pretty ugly out there, but we’re not ready to join the panic just yet. Today’s selling came on lower volume than yesterday, which means we just have a lack of buyers here. That doesn’t mean the market can’t keep drifting lower until buyers step in, and it doesn’t mean that downside volume can’t begin to accelerate, but those signs aren’t there yet. The Nasdaq tested and held 2400, the 62% retracement level of the 2251-2644 run-up. As long as it holds above the 62% Fibonacci retracement level, this down move is not a trend in its own right. NYSE new highs and new lows continue to look good; someone is accumulating here. We finally got a positive day on the Nasdaq new highs/new lows yesterday, but that has reversed today. Still, the Nasdaq news lows are worth one more look here. Tuesday had a massive positive divergence in Nasdaq new lows: on a lower low (2251), new lows (172) were far lower than the 900 level the index hit when it reached 2288 in December. It was such a stunning divergence that we checked four d

ifferent data sources to make sure it was accurate. It meant that the leaders were falling, but that the rank and file had stopped declining. That alone signaled that a turn might be coming. Furthermore, 2200 would complete a measured bear move from the 4289 August peak, duplicating the April-May 5132-3042 decline. It’s hard to go much lower than we’ve gone without a 1-3 month consolidation. So we’d like to hold 2400, but if not, we do not see significantly lower lows coming here.

The intraday charts, which have been our guide all the way down, do not show any terribly bearish patterns, such as rising wedges, unless we really make a stretch. Unless clearly recognizable wedges begin to form, we have to assume that the trend is no longer down. Furthermore, all the indexes took out recent highs, another positive, because it does not give us any big downside targets from the previous declines. Two nearby supports look particularly strong to us here: 10,650 on the Dow, and 675 on the S&P 100. A look at the intraday charts:

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