Cautious comments from Sun Microsystems took the wind out of an early rally on Tuesday. Traders awaited Cisco’s earnings due out after the close.
The ISDEX http://www.wsrn.com/apps/ISDEX/ rose 2 to 386, and the Nasdaq climbed 27 to 2671. The S&P 500 added 2 to 1356, and the Dow rose 23 to 10,989. Volume rose to 450 million shares on the NYSE, and 825 million on the Nasdaq. Advancers led 16 to 12 on the NYSE, and 19 to 14 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.
Cisco tacked on 13/16 to 35 3/8 ahead of its earnings report tonight. Analysts cut earnings estimates to 19 cents a share after two stealth warnings from the company last month. Applied Micro
plunged 7 15/16 to 56 7/16 after confirming that some customer orders had been canceled. The company said that Juniper Networks
did not cancel any orders. Cisco is another AMCC customer.
Sun Microsystems slipped 1/16 to 27 13/16 after the company told analysts than January was weaker than expected for the company.
JDS Uniphase rose 2 5/16 to 52 5/16 on news that the Justice Department has approved the company’s merger with SDL
. Nortel
will purchase JDSU’s laser operations.
iVillage rose 5/8 to 2 11/32 after beating estimates and announcing that it will acquire competitor Women.com
, unchanged at 23/32.
Amazon.com rose 1/2 to 14 15/16 despite more negative comments from Lehman Brothers about the company’s credit.
eToys , down 1/8 to 5/32, said it will layoff the remainder of its employees effective April 6. The company will run out of cash on March 31, and said it expects no additional capital.
CacheFlow , off 1 7/8 to 12 1/8, issued an earnings warning. Onvia
, off 5/32 to 1 11/32, missed estimates, as did Sagent
, down 1/4 to 3 5/8.
Netegrity rose 3 1/8 to 62 9/16 on a partnership with VeriSign
.
MicroStrategy tacked on 3/4 to 16 7/8 on a deal with Compaq
.
InfoSpace dropped 19/32 to 3 21/32 after announcing it will cut 250 jobs, or 21% of its workforce.
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The Nasdaq 100 and the Dow ran into resistance this morning. Unless Cisco has some surprisingly good numbers or comments tonight, the market could be headed for a pullback here. The Nasdaq 100 (first chart) ran into its September downtrend line today around 2500 and pulled back. So while the Nasdaq (second chart) is holding above its September downtrend line, the large-cap techs are looking a little weak to us here. To the downside, we want to hold yesterday’s lows of 2400 on the Nasdaq 100 and 2600 on the Nasdaq, the indexes’ lower rising channel boundaries. The ISDEX (third chart) continues to hold above 380 support, a plus for Net stocks.
The S&P 500 is well above any critical support. The closest, the lower rising channel boundary, is around 1330.
The Dow continues to struggle at 11,000 resistance. The index took out its early January intraday high of 11,028 today, but the Industrials have so far been unable to take out the important 11,000 level on a closing basis. A close above 11,007 would be bullish under Dow Theory, the oldest school of technical analysis, particularly if the Dow Transports can stay above 3000; the Trannies continue to hold comfortably above that level. But the 11,000 level has been one tough obstacle for the Industrials, reflecting its importance to the health of the market and the economy as a whole. To the downside, we expect that lower trendline at about 10,700 to hold, if the Dow gets that low.
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