Technology stocks sold off in rising volume on Tuesday after the Supreme Court refused to hear Microsoft’s antitrust appeal and analysts downgraded chip stocks.
U.S.-led attacks on Afghanistan targets entered their third day, and U.S. officials said most Taliban air defenses have been taken out.
The ISDEX http://www.wsrn.com/apps/ISDEX/ slipped 2 to 126, and the Nasdaq lost 35 to 1570. The S&P 500 lost 5 to 1056, and the Dow gave back 15 to 9052. Volume rose to 1.17 billion shares on the NYSE, and 1.52 billion on the Nasdaq. Decliners led 15 to 14 on the NYSE, and 20 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.
After the close, Motorola met estimates with a 7-cent loss but missed revenue estimates, but said the environment remains challenging; Lam Research
beat estimates, but largely on a tax gain; Rational
missed estimates; Avaya
warned; and Kemet
reaffirmed guidance.
Microsoft fell 3.48 to 54.56 after the high court declined to hear the company’s appeal for a new trial. SoundView also made negative comments about the company’s transition to a licensing program.
Intel lost .79 to 21.45 on negative comments from CS First Boston. But AMD
rose lightly on a marketing deal with Microsoft.
University of Phoenix Online fell .92 to 31.45 despite matching estimates with 10-cent earnings.
E-Loan rose .29 to 1.60 after beating estimates by 6 cents with a 1-cent profit.
Network Associates lost .86 to 15.59 on a Morgan Stanley downgrade.
Commerce One fell .24 to 2.57 on a warning. i2
surged .89 to 5.00 on hope that the company will meet its numbers and sign a contract with AT&T.
Some technical comments on the market: Note: We include 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 Dow (first chart) and S&P 500 (second chart) appear to be forming triangle consolidations the last couple of days, potentially descending triangles, which carry a negative bias. If this is just a correction in an uptrend, the next wave down should be the last. A break of 9000 on the Dow or 1052 on the S&P 500 would start the next wave down. If this is just a correction, the Dow should find support at 8850-8895, and critical support is 8672-8686. 9066 is first resistance, and then about 9120. For the S&P, support should be found at 1041-1052, and critical support is 1017-1020. A move above 1063 could give the index room to run. On the Nasdaq (third chart), support is 1550-1560, and resistance is 1590-1600. The semiconductor index (fourth chart) retraced a little harder than we’d like to see, back to yesterday’s breakout point around 400; it needs to reverse here. The Transports (fifth chart) became the last of the old economy indexes to break down today. Those broken bearish rising wedges in the Dow, S&P, cyclicals, Transports and bank index suggest that this may be more than just a correction in an uptrend.
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.
