Stocks Shake Off Nortel Warning

Stocks fell early Tuesday on comments from Nortel that business conditions have worsened in the last few weeks, but the market managed to pare its losses by the close.

The ISDEX slipped 1 to 158, and the Nasdaq lost 12 to 1834. The S&P 500 declined 4 to 1107, and the Dow gave back 21 to 9863. Volume declined to 1.1 billion shares on the NYSE, but rose to 1.61 billion on the Nasdaq. Decliners led by a few shares on the NYSE, and by 18 to 17 on the Nasdaq.

After the close, Network Appliance , Overture eSpeed and Applied Materials climbed on better than expected results. Applied Materials said business conditions remain difficult. S1 slipped despite better than expected results.

During the day, Nortel fell 6% after saying that business conditions have worsened notably in the last 25 days, and that the company’s CFO had resigned after it was discovered he had traded on company news. gained slightly despite missing revenue estimates.

Internet Security rose 5% after reporting a new security vulnerability.

Overture surged 27% on an expanded relationship with MSN and positive comments from Goldman Sachs.

Some technical comments on the market: Note: To see the charts in the text email newsletter, click on the story link at the top of the newsletter.

The Dow (first chart) seems to be forming the market’s latest bearish broadening pattern over the last three weeks; this rally may have some more upside, but be careful just above 10,000. 9918-9940 is first resistance, and 9750-9811 is important support. The S&P 500 (second chart) faces tough resistance from 1110-1118. 1130 is possible if it can clear that. 1098-1103 is important support. The Nasdaq (third chart) faces tough resistance from 1850-1865. 1815-1817 is first support.

Special report: For a free introduction to technical chart patterns, visit,1785,2571_500051,00.html.

News Around the Web