Strong earnings and a bullish outlook from optical equipment maker Ciena sent stocks soaring on Thursday.
The ISDEX http://www.wsrn.com/apps/ISDEX/ soared 17 to 370, and the Nasdaq surged 86 to 2577. The S&P 500 climbed 11 to 1327, and the Dow rose 88 to 10,883. Volume rose to 495 million shares on the NYSE, and 960 million on the Nasdaq. Advancers led 15 to 13 on the NYSE, and 20 to 12 on the Nasdaq. For earnings reports, visit our earnings calendar at http://www.wsrn.com/apps/earnings/internet.xpl and reported earnings at http://www.wsrn.com/apps/earnings/ireported.xpl. For after hours quotes and news, visit our after hours trading site at http://www.afterhourstrading.com.
Ciena soared 15 to 91 13/16 after beating estimates by 3 cents with 18-cent earnings and raising forward guidance higher. It was hard to find a telecom equipment or networking stock that didn’t rise on the news. Corning
surged 4.35 to 42.25, Juniper
climbed 6 7/8 to 96 1/4, and Sycamore
bolted 3 1/8 to 29 7/16.
Wireless Facilities , off 2 5/16 to 28 7/16, beat estimates by 2 cents with 24-cent earnings, but JP Morgan downgraded the company on earnings visibility concerns.
Dell , which reports earnings tonight, rose 2 3/16 to 25 1/8 on news that the company will lay off 4% of its workforce. Hewlett-Packard
also reports tonight.
Amazon.com lost 5/16 to 14 1/8 on a Prudential Sell rating. Sell ratings are rare on Wall Street, but Amazon seems to collect them.
Check Point , up 6 13/16 to 97, and Internet Security Systems
, up 7 15/16 to 76 1/2, received Strong Buy ratings from Lehman Brothers.
Broadcom , up 7 1/2 to 88 11/16, and Applied Micro
, up 5 7/8 to 53, benefited from CIBC World Markets comments that communications chip companies had fallen below their long-term growth rates.
Openwave soared 8 5/16 to 65 on a CIBC Buy rating. Competitor Comverse
, which won an AT&T Wireless contract yesterday, rose another 10 1/4 to 110 5/16.
Interwoven surged 5 11/16 to 25 3/4 on a Prudential Volpe Strong Buy rating.
Homestore.com rose 4 5/16 to 34 1/4 on news of market share gains and hopes that a Department of Justice investigation will soon end.
Loudeye slipped 1/4 to 2 1/32 despite beating estimates. iXL
lost 5/16 to 1 3/4 after missing estimates. Rare Medium
surged 21/32 to 2 31/32 on strong earnings. Deltathree.com
slipped 1/32 to 2 1/16 despite beating estimates.
Some technical comments on the market: Note: We are now including charts in the technical market commentary. If you can’t get the charts via the e-mail newsletter version, try this link: http://www.afterhourstrading.com/column.html
The Nasdaq gapped up above its September logarithmic downtrend line at about 2525 this morning (first chart). Since that gap up from 2491 occurred within a trading range, it is likely to fill at some point, but today’s breadth is nice to see after yesterday’s reversal at critical support, the 1990 logarithmic trendline at 2388 (second chart). To the upside, that upper trendline in the first chart at about 2800 is critical resistance; if the Nasdaq can get above that, it should be a straight shot to 3000. The 2600-2700 range could provide resistance before we get to that line, however. To the downside, we’d like to see the index for
m a new uptrend off its lows of Jan. 3 and yesterday.
The S&P 100 and 500 (first and second charts) recovered their December uptrends nicely this morning. To the downside, the S&P 500 is likely to find strong support at its broken September downtrend line (third chart) at about 1300. If the index can hold that 1300 level, it would form a perfect inverted head and shoulders bottom; a strong move above that neckline at 1390 could carry the S&P 500 all the way to 1500. That may sound like a lot, but the average one-year gain in the stock market after two Fed rate cuts is 28%.
The Dow closed just under its October uptrend line at 10,800 yesterday, but bounced back strongly today. To the upside, we want to see the Dow take out 11,000 resistance convincingly, and soon. That is the upper boundary of what could be a bullish ascending triangle, with upside potential to 11,700 to 12,300. That pattern is quickly running out of room, however. A close above 11,007 would also be bullish under Dow Theory, the oldest school of technical analysis, particularly if the Dow Transports can stay above 3000; the Trannies are back above that level today.
Special report: For a free introduction to technical chart patterns and an overview of last year’s action in the stock market, visit http://www.internetstockreport.com/guest/article/0,1785,2571_500051,00.html.
