Technology stocks slid Tuesday on rumors that Cisco Systems may warn.
The ISDEX http://www.wsrn.com/apps/ISDEX/ fell 4 to 145, and the Nasdaq dropped 43 to 1742. The S&P 500 fell 7 to 1117, and the Dow gave back 40 to 10,208. Volume rose to 1.22 billion shares on the NYSE, and 1.65 billion on the Nasdaq. Advancers led 17 to 13 on the NYSE, but decliners led 19 to 15 on the Nasdaq.
After the close, Research In Motion topped estimates but warned, and Sonus
beat estimates but did not offer guidance.
During the day, Cisco fell 8% on negative analyst comments and rumors that the company may warn.
Compaq slipped despite raising estimates, while Nortel
edged higher despite warning and a downgrade to junk status.
Microchip and JDA
rose after preannouncing better than expected results. Citrix
and JNI
fell on warnings. Kronos
plunged 22% on a warning.
Broadcom slipped 3% after announcing the acquisition of Mobilink Telecom.
AOL Time Warner slipped after announcing that Barry Schuler has moved from CEO of the AOL unit to a new digital services division, with COO Bob Pittman taking over his AOL responsibilities.
Emulex continued to fall on IBM’s
warning yesterday. IBM is the company’s biggest customer.
Yahoo slipped 2% ahead of tomorrow night’s earnings report.
Some technical comments on the market: Note: To see the charts in the text email newsletter, click on the internetstockreport.com story link at the top of the newsletter.
The Nasdaq (first chart) took out its lower down channel line on a closing basis and may be forming a steeper down channel, both potentially bearish developments. Today’s action formed a bearish “dark cloud cover” candlestick, a short-term negative. That said, a low-volume retest of the February low at 1696 could potentially set up a rally. First support is 1724-1733, and resistance is 1757 and 1785. The new lower trendline looks like it could be at about 1710 tomorrow. The Dow (second chart) and S&P (third chart) remain mired in downtrends. For the Dow, first support is 10,190, and the lower trendline should be at about 10,030 tomorrow. A move above 10,305 would break the downtrend. For the S&P, support is just under 1110, and the index would break out above 1132.
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