Stocks Rebound Slightly On Greenspan Testimony

Stocks rebounded slightly Tuesday morning on Fed Chairman Alan Greenspan’s repetition of last week’s Senate testimony in the House. Unlike last week, however, Greenspan took a more neutral view of the economy. Shares of Akamai dropped despite better than expected earnings.

The ISDEX gained 4 to 768 and the Nasdaq rose 9 to 3990. The S&P added 4 to 1469, and the Dow tacked on 19 to 10,704. Volume rose to 435 million shares on the NYSE and 690 million on the Nasdaq. Breadth was even on the NYSE, while declining issues led 20 to 14 on the Nasdaq. July’s Consumer Confidence reading came in stronger than expected. The major economic reports for the week are the second-quarter Employment Cost Index on Thursday and the GDP on Friday. eBay and Vignette are among the companies reporting earnings tonight, and reports after the close tomorrow. For earnings reports, visit our earnings calendar and reported earnings.

Akamai Technologies fell 16 7/16 to 91 7/16 despite reporting a second-quarter loss of 50 cents a share, 7 cents better than estimates. There appeared to be some concern about a 57-million share lockup expiring today based on a Barron’s report, but said the report was erroneous. A 2.8 million-share lockup will expire on Aug. 1, and 58 million on Sept. 13. Merrill Lynch began coverage with a near-term Accumulate/long-term Buy rating. reported a second-quarter loss of 23 cents, 8 cents better than estimates. But the stock fell 2 7/8 to 17 1/4 after Donaldson, Lufkin and Jenrette lowered its price target to $80 from $160.

FreeMarkets rose 4 15/16 to 58 7/16 after the company reported a second-quarter loss of 34 cents a share, 7 cents better than estimates. The company’s revenue number of $19.4 million was well ahead of estimates, and Merrill Lynch raised its rating from Accumulate to Buy.

ValueClick soared 2 5/16 to 12 9/16 after reporting second-quarter earnings of 6 cents a share, a nickel better than estimates. But , which also beat estimates by a nickel with a second quarter loss of 8 cents a share, fell 1 1/2 to 10 9/16.

Cobalt Group lost 17/64 to 6 9/16 after reporting a second quarter loss of 27 cents a share, 9 cents better than estimates. Net Perceptions beat estimates by a penny with a second-quarter loss of 16 cents a share and was unchanged at 15 1/8. lost 9/32 to 5 after missing estimates by a penny with a second-quarter loss of 25 cents a share. beat estimates by 11 cents with a loss of 48 cents a share, but the stock fell 2 1/8 to 8 7/8.

Shares of Red Hat lost 3 1/8 to 20 5/8 on news that CEO Harold Covert has resigned. lost 4 3/4 to 34 on rumors that its COO may be leaving.

VeriSign fell 8 1/8 to 176 1/2 despite bullish comments from Morgan Stanley Dean Witter analyst Mary Meeker. The company reports earnings after the close tomorrow. soared 1 7/32 to 2 1/8 on news that the company has received $50 million in financing.

Ariba gained 5 3/4 to 122 1/2 on news of an alliance with IBM and Cisco.

Navisite , up 2 1/8 to 42 1/8, and Data Return , up 2 7/8 to 30 1/2, gained on positive comments from Merrill Lynch. Merrill predicted 40% growth for the Internet infrastructure space for the next decade.

The IPO of Web hosti

ng firm Interland had a lukewarm reception, declining to 10 1/8 after pricing at 12.

Some technical comments on the market: The S&P 500 came close to negating yesterday’s rising wedge breakdown this morning. The trendline broken yesterday has risen to about 1475 (it’s rising at a rate of about 2-3 points per day), and the index turned back at 1476 today. A failure to penetrate that trendline would be bearish. Yesterday’s break gives the index potential downside to 1361, where the wedge began in May, but the 1460 and 1440 areas could provide some support. Critical support on the index is 1380, the October 1998 trendline. The Nasdaq needs to get back above 4100 quickly to negate its breakdown out of a rising wedge yesterday. The break gives that index potential downside to 3042, where the wedge began. Below 3950, support on the Nasdaq could be found in the 3900 range, but important recent support on the Nasdaq is at 3820-3830. The ISDEX negated its recent breakout yesterday, falling back below 790. The ISDEX could find some support at 725, a weak trendline from May. Below that, 700 has proven strong support; a break of that level could carry the ISDEX all the way down to 600. To the upside, there is 790 resistance, and the index turned back recently at 840, just below its 50% retracement level of 845. If Net stocks can get past 850 resistance, they could go to 880. The Dow is forming a 200-point trading range bound by 10,675-10,875. A break of either level should determine direction on the Dow. The index finished just above 10,675 yesterday. The upper boundary of the Dow’s bearish diamond pattern is 11,000, and the lower boundary is 10,200-10,300.

News Around the Web