Techs Slip, Blue Chips Gain

Technology stocks slipped Friday on disappointing earnings results, but blue chips rose on hope that the government will limit asbestos liability.

The ISDEX slipped 1 to 179, and the Nasdaq gave back 4 to 1937. The S&P 500 climbed 1 to 1133, and the Dow rose 44 to 9840. Volume declined to 1.34 billion shares on the NYSE, and 1.65 billion on the Nasdaq. Advancers led by 15 to 14 on the NYSE, but decliners led 18 to 16 on the Nasdaq.

RSA Security plunged 25% on news of an SEC investigation into an accounting issue and trading in the company’s stock.

Qualcomm gained 5% despite disappointing earnings, and PMC-Sierra gained 10% on its results.

But other companies reporting earnings fell: PeopleSoft , JDS Uniphase , VeriSign , Gateway , BMC and Sanmina all fell on their results.

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.

Another day, another unimpressive bounce, which leads us to believe that the market may just be consolidating before further declines. The Dow (first chart) has consolidated at the low end of a 600-point decline; that gives the index potential for another 600-900 point decline. However, MACD and stochastics in all the index charts give the market a chance to turn up here, maybe for an end of the month bounce. That said, we wouldn’t be surprised if the Dow continued down early next week; it feels that heavy here. To the downside, 9800-9820 is first support, then 9750, and 9600-9680 is critical support. First resistance is 9858-9900, and then 9930 and 10,000. The Nasdaq (second chart) gapped down this morning, but managed to recover by the close to form a doji (indecision candlestick) on its 200-day moving average. Support is 1920 and 1860-1880, and resistance is 1960 and 2000. The Nasdaq 100 (third chart) looks like it backtested its recent breakdown and then turned back down. The low 1400s still seem like a good target based on that chart. Resistance is about 1580-1585. The S&P 500 (fourth chart) has support at 1125-1132, and substantial resistance at 1140 and then 1145. Finally, ECRI, a very good economic forecasting firm, believes the recession will end sometime in the next two months based on its leading indicators, but a look at that chart sure seems like it’s getting toppy and could turn down. ECRI believes the recovery will be a weak one.

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

News Around the Web