Stocks Slip As Consumer Confidence Slides

A weaker than expected consumer confidence reading and more rumors of U.S. troops scouting in Iraq cut short a stock market rally on Tuesday.

The ISDEX rose 1 to 148, and the Nasdaq gave back 3 to 1766. The S&P 500 was unchanged at 1109, and the Dow declined 30 to 10,115. Volume rose to 1.32 billion shares on the NYSE, but declined to 1.68 billion on the Nasdaq. Advancers led 18 to 13 on the NYSE, and 18 to 16 on the Nasdaq.

After the close, Veritas reaffirmed guidance and Semtech matched estimates.

During the day, Flextronics fell 6% on a warning and Macrovision was unchanged after topping estimates but guiding lower.

Rambus surged 23% on a new chip design, and Redback soared 21% on bullish conference comments. rose 5% despite news of heavy selling by CEO Jeff Bezos.

Broadcom was up slightly after Intel unveiled a competitive chip at its developer forum yesterday. Intel slumped 3%.

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) gave up yesterday’s breakout of a rising wedge, a negative sign, but held its breakout of a broadening upper boundary around 10,075-10,080, a positive. In short, a neutral picture between those two levels, which should be at about 10,145 and 10,085, respectively, for tomorrow. One bullish sign is the breakout in the cyclicals today (second chart), but that index needs to hold 565 tomorrow. The S&P (third chart) formed a doji, or indecision candlestick, at its downtrend line today. Resistance for tomorrow is 1110 and 1115-1118, and support is 1098-1102. The Nasdaq (fourth chart) faces tough resistance from 1790-1805; a break through that resistance would look good. Support is 1750 and then 1724-1731. Fed Chairman Alan Greenspan testifies before Congress tomorrow, and expectations are high that he will signal that an economic recovery is here. Will the market be disappointed or rewarded?

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

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