Stocks Pull Back

Stocks posted strong early gains Thursday on European rate cuts and better than expected weekly unemployment claims, but then gave back those gains by the close.

The ISDEX slipped 1 to 160, and the Nasdaq declined 9 to 1827. The S&P 500 added 2 to 1118, and the Dow climbed 33 to 9587. Volume rose to 1.49 billion shares on the NYSE, and 2.29 billion on the Nasdaq. Advancers led by 16 to 14 on the NYSE, and 18 to 17 on the Nasdaq.

After the close, NVIDIA rose on better than expected results, and Palm edged higher after announcing the resignation of its CEO and reaffirming guidance.

During the day, the Dow gave back most of a 167-point gain and the Nasdaq was up 51 before finishing in the red.

Applied Materials slipped .94 to 38.40 on negative analyst comments, and the Semiconductor Industry Association lowered industry growth forecasts for next year. AMAT reports earnings next Wednesday, and Dell next Thursday.

AMD fell 1.20 to 12.40 on earnings concerns.

Liberate slipped .60 to 7.35 after Charter licensed competing software from Microsoft .

Wireless Facilities lost .44 to 5.85 after missing estimates.

Corning fell 1.01 to 7.74 after announcing another trip to the corporate bond market.

Saba gained .50 to 3.37 on a deal with Cisco .

Some technical comments on the market: Note: We include charts in the technical market commentary. If you can’t get the charts via the e-mail newsletter version, try this link:

Two straight days of reversal candlesticks on the indexes coinciding with a 34-day cycle turn is a pretty good place to look for a pullback. The Dow (first chart) hit the upper trendline of a broadening top at its high today (9721). That may not be its only test of that upper trendline, but a doji and an inverted hammer the last couple of days make a short-term pullback the likely scenario here. A broadening top is almost always bearish, however; the volatile conditions required to form the pattern rarely occur at bottoms, and we have yet to see one fail in this bear market, be it in Microsoft, Nokia or Juniper Networks. Support is 9520-9560, and resistance is that upper trendline, which should be at about 9750 tomorrow, also coinciding with the index’s May downtrend line. The Nasdaq (second chart) continues to struggle at its May downtrend line here. Resistance tomorrow should be at about 1840-1850, and support at about 1810-1815; a break of either target should dictate short-term direction. The S&P (third chart) is also at a critical juncture. Resistance is 1120-1125, and support is 1115.

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