The major indexes rose to their recent highs ahead of the Federal Reserve’s decision on interest rates due out at 2:15 p.m.
The ISDEX gained 9 to 784, and the Nasdaq rose 23 to 3976. The S&P 500 added 3 to 1503, and the Dow climbed 78 to 11,057. Volume rose slightly to 345 million on the NYSE and 590 million on the Nasdaq. Advancers led 13 to 11 on the Big Board and 18 to 17 on the Nasdaq. The almost universal opinion is that the Fed will leave rates unchanged. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our new after hours trading site.
Lesser-known B2B stocks had a chance to shine after Bear Stearns made positive comments on the whole sector. Opus360 soared 2 1/8 to 4 1/2, Clarus
bolted 7 5/8 to 45 9/16, and Global Sources
soared 8 3/8 to 35 3/8.
DSL.net soared 3 5/32 to 6 9/32 on news of an alliance with IBM
.
MP3.com rose 2 3/16 to 9 15/16 on news that it had settled a copyright infringement suit with Sony Music Entertainment.
Ameritrade added 1 7/8 to 17 13/16 on takeover rumors. Also helping the gains are a large short interest in the stock.
Shares of recent IPO WebEx gained 3 1/8 to 33 on a Deutsche Bank Alex. Brown Strong Buy rating. Another recent IPO, Evoke
, continued to add to its recent gains, rising 2 3/16 to 9 9/32. But Corvis
declined 3/4 to 90 despite positive analyst comments, and Avici
lost 11 1/4 to 130 3/4 on a Lehman Brothers Neutral rating.
drkoop.com slipped 9/64 to 1 3/16 on news of an SEC investigation into charges that the company overstated its business prospects. The company has also been the subject of takeover rumors.
Art Technology Group added 4 1/8 to 90 1/8 on a Salomon Smith Barney Buy rating and $108 price target.
General Magic gained 1 5/8 to 7 1/16 on news that it will participate in Nuance’s new VoiceWeb ASP program.
Digital Island gained 1 5/8 to 27 7/8 on news of an alliance with BMG Entertainment.
Some technical comments on the market: The Dow, S&P 500 and Nasdaq are all right at major resistance, leading us to believe that the market could be set up to sell on the Fed news. A move above 11,200, 4000 and 1510 on the respective indexes would convince us otherwise. As we said yesterday, the boundaries of the recent uptrends in the S&P 500 and 100 indexes are beginning to converge, forming a “rising wedge” and suggesting that this rally may be losing steam. The S&P 500 is right at the upper boundary of the wedge and just below a downtrend line (1506) extending from the 1553 and 1517 peaks, and the S&P 100 has struggled at its recent high (820). A decline below 1490, where the S&P 500 found support yesterday, could carry the S&P 500 back to the 1450-1460 range. As we’ve noted before, this rally has been largely unconvincing, as volume has been low, follow-through rallies have barely met the minimum requirements, and there have been at least a few days of institutional selling. The Nasdaq is above its 200-day moving average (about 3960), but so far it has looked like a pretty weak crossing attempt. The Nasdaq continues to run into resistance around 3982, the peak from late April/early May.
The Nasdaq may be forming a bearish flag pattern in the daily chart since bottoming at 3521 two weeks ago, giving the index potential for more downside, as much as 600 points. A break below 3800 would be a warning sign. However, a flag pattern has at most three weeks to form, so if the Nasda
q can avoid a sell-off for the rest of the week, we have some hope here. The ISDEX also may be forming a bearish flag pattern here, signaling potential further downside on that index. Key resistance is now around 810, the lower boundary of a broken bearish rising wedge. Support on the ISDEX is at 693-700, 650 and 600; a break below 700 would just about break the bearish flag pattern. The Dow needs to stay above the 10,950 area to preserve the upside breakout of the diamond formation, and so far it has done that. Resistance on the Dow is just under 11,200. One other item of note: London’s FTSE-100 also is breaking out of a bearish diamond pattern. Could this be a rare case where these formations act as consolidations before further up moves? As we’ve said before, we need to see volume behind the moves to be convinced.
