Warnings from Nokia and Lucent and worries about business at Cisco and Microsoft sent tech stocks sprawling on Tuesday.
The ISDEX http://www.wsrn.com/apps/ISDEX/ fell 4 to 173, and the Nasdaq lost 32 to 1897. The S&P 500 slipped 2 to 1165, and the Dow gained 21 to 10,632. Volume rose to 1.31 billion shares on the NYSE, but declined to 1.73 billion on the Nasdaq. Decliners led 16 to 15 on the NYSE, and 20 to 14 on the Nasdaq.
After the close, Comverse fell on a warning, and Microchip
, CMGI
and WebMD
topped estimates.
During the day, Nokia fell 6% and Lucent
lost 10% on warnings.
Cisco and Microsoft
slipped on Goldman Sachs comments that results may hit the low end of estimates. Microsoft fell back below its 200-day moving average at 64.05.
IBM rose 3% on a better than expected SEC filing.
JDS Uniphase fell 10% on news of insider sales.
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 Dow (first chart) continues to bounce around a rising resistance line, and whichever way the index breaks from that line could lead to a significant move. Rising trendline breakouts have been particularly bullish on the Dow, leading to 1,000-point rallies in April and October 2001. That is because a rising trendline usually indicates distribution, so a breakout of one takes substantial buying pressure. But it also means that a failure below that line could lead to a sharp pullback, potentially all the way to the lower broadening top boundary at 9300-9500. A break of 10,664 or 10,510 could dictate direction. 10,640-10,800 is tough resistance, and 10,425 and 10,330-10380 are next supports below 10,500. For the S&P (second chart), the levels to watch are 1178 to the upside and 1160 to the downside. The Nasdaq (third chart) held a pretty critical support level at 1880 today; a move below that could lead to a substantial pullback. 1850 is first support, then 1830 and 1800 (1793). The Nasdaq formed an island reversal on the gap down today, which means it could potentially be headed for a retest of last month’s lows under 1700. Resistance is 1902 and 1929-1940. The SOX (fourth chart), the semiconductor index, has critical support in the 580-595 area, and 638 is critical resistance.
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