Stocks posted modest gains Monday, as traders awaited key earnings reports later this week.
The ISDEX added 7 to 655, but the Nasdaq slipped 26 to 3290 on weakness in Intel and Microsoft. The S&P 500 was unchanged at 1374, and the Dow added 46 to 10,238. Volume declined to 1 billion shares on the NYSE and 1.78 billion on the Nasdaq. Decliners led by 14 to 13 on the NYSE and 20 to 19 on the Nasdaq. There are a lot of big earnings reports this week, including Intel and IBM tomorrow, and Microsoft and Sun Microsystems on Wednesday. The Consumer Price Index Wednesday is the big economic report for the week. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our after hours trading site.
B2B leaders were strong heading into earnings reports. Ariba , which reports Wednesday, bolted 10 11/16 to 132 3/8, Commerce One
, which reports Thursday, gained 5 1/2 to 68 5/16, and i2 Technologies
, which reports tomorrow, added 2 1/16 to 184 1/16. PurchasePro
, which also reports tomorrow, soared 10 1/8 to 45 3/16 after Prudential called the company its Single Best Idea, following a 6-point gain on Lehman Brothers comments on Friday.
Interwoven , up 12 3/16 to 104 13/16, also rose ahead of its earnings tomorrow. Akamai
, which reports on Wednesday, rose 4 to 53 on a CIBC World Markets Strong Buy rating and $100 price target.
About.com climbed 5/16 to 20 1/16 after the company pre-announced better-than-expected results.
eBay surged 4 to 59 7/8 after trading as low as 52 1/4 on reports of a lawsuit against the company for the sale of fake sports memorabilia, raising concern that the company may need to verify the authenticity of items sold on its site.
Juniper Networks , up 15 3/8 to 243 7/8, continued to rise after a blow-out earnings report Thursday. Corning
added 7 7/8 to 100 3/4, continuing to gain on a positive earnings pre-announcement. RSA Security
, up 1 11/16 to 53 5/8, also continued to gain in the wake of better than expected earnings.
Digital Island rose 1 1/16 to 15 5/16 on an alliance with Microsoft
.
Internet consultants continued to rebound, led by Sapient , up 6 1/2 to 41 5/8, Scient
, up 3 to 19 1/2, and Razorfish
, which gained 3/8 to 5 3/8. A Barron’s article said bargain hunters have descended on the space.
Inktomi regained 2 7/8 to 85 1/8, turning back at 92 3/8. As we’ve said, if the company’s breakdown out of a descending triangle was for real, it should have a hard time getting back above $90, and could still have significant downside ahead. The company reports earnings Oct. 26.
Some technical comments on the market: Note: We are now including charts with the technic
al market commentary; just click on the links in the story below to go to them. If you have trouble accessing the charts via the e-mail newsletter version, try this link: http://www.afterhourstrading.com/column.html
Not a bad day considering Friday’s strong gains, although semiconductor stocks are a little weaker than we’d like to see. The key at this point is earnings reports, and probably no day is more important than Wednesday, when Microsoft and Sun report after the close. Remember, we need a high-volume follow-through rally any time between Wednesday and the end of next week.
The Nasdaq broke out of a falling wedge at about 3175 Friday, indicating that at least a short-term bottom could be in place. Based on the size of that pattern, the Nasdaq could have room to 3800, but major resistance could be found at 3500, around the August 3521 bottom and the 38% Fibonacci level from the 4259 to 3054 decline (3511). Before then, the September downtrend line at 3450 could pose some resistance. To the downside, the double bottom around 3050 (3042 and 3054) is critical support. Also, the Nasdaq may be forming an inverse head-and-shoulders in the intraday charts, which could lead to a 300-point move if the neckline (the black line) is broken to the upside.
The S&P 500 is holding above its 1994 logarithmic trendline at about 1350, a very important level. The index found support last week at 1329, just above its Februrary bottom at 1325. Also in that chart, notice what could be a large broken rising wedge that called for a retest of the lows on that index. To the upside, next resistance is 1380. The index’s September downtrend line is now at about 1390.
The ISDEX is back above its September downtrend line at about 650, the first index to achieve that distinction. Next resistance is 700. The Dow cleared resistance at 10,200 this morning, a good sign since the index struggled at that level Friday. Next resistance is 10,400, its September downtrend line.
