Techs Strong, But Blue Chips Weak

Technology stocks were strong Tuesday, but blue chips slipped on weak factory orders and Argentina’s impact on financial stocks.

The ISDEX rose 1 to 197, and the Nasdaq gained 18 to 2055. The S&P 500 declined 4 to 1160, and the Dow gave back 46 to 10,150. Volume declined to 1.24 billion shares on the NYSE, and 1.86 billion on the Nasdaq. Advancers led 16 to 15 on the NYSE, and 19 to 15 on the Nasdaq.

After the close, Cisco slipped after the company said business remains weak. Hutchinson and Parametric guided higher.

During the day, AOL slipped 2% on a warning and huge charge against earnings. Gateway plunged 25% on a warning.

Altera rose 4% after preannouncing a charge and in-line results. BMC climbed 4% after raising guidance, and Newport gained 7% after saying it will beat earnings estimates but miss or meet revenue numbers.

UTStarcom gained 7% on a contract win. Veritas tacked on 4% on a positive outlook. VeriSign gained 6% after saying it will meet or beat estimates.

Ciena declined after saying it still sees no recovery in the telecom equipment sector.

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.

The Dow (first chart) fell back into its recent consolidation today under 10,175. That will be first resistance tomorrow. The big resistance on the Dow remains 10,331-10,342, its 40-month moving average and 61.8% retracement of its all-time high. First support is 10,121 and then the 200-day moving average just under 10,100. The S&P 500 (second chart) pierced its old downtrend line today but managed to close back above it. That 1158 level is important support. Resistance is 1166, the 200-day moving average that the index gave up yesterday, then 1177-1187. 600 on the S&P 100 is also critical resistance here (third chart). The Nasdaq (fourth chart) has support at 2040 for tomorrow, and resistance is 2081. The major indexes finished the first five days of the year on the plus side, one sign that 2002 may not be a bad year for stocks. However, there was some weakness hidden within that positive first week, such as the NYSE, biotech stocks, banks and utilities.

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