Waiting For The Fed

Traders bid stocks higher Tuesday in hopes of a market-friendly decision on interest rates from the Federal Reserve at 2:15 p.m.

The ISDEX rose 14 to 425, and the Nasdaq climbed 51 to 2675. The S&P 500 rose 12 to 1335 and the Dow added 43 to 10,689. Traders were betting that the Fed could move to an easing bias and might even cut interest rates. A shift to a neutral bias from the Fed’s current tightening bias was almost universally expected. Volume declined to 520 million shares on the NYSE and 865 million on the Nasdaq. Advancers led by 14 to 12 on the NYSE, but decliners led 19 to 16 on the Nasdaq. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our after hours trading site.

eBay lost 1 5/8 to 36 11/16 after Dain Rauscher Wessels cut its price target from $115 to $50. Yahoo fell 1 1/8 to 30 7/8, hitting a new 52-week low at 30 1/8.

Handspring recovered 6 1/16 to 50 13/16 after announcing the launch of its mobile VisorPhone. The stock had dropped in recent days as its lock-up period expired.

Some old leaders were back in favor. Ariba climbed 5 to 67 1/4, i2 rose 2 15/16 to 52 5/8, Openwave surged 5 5/8 to 56 1/2, and Juniper added 5 5/8 to 134 13/16.

Ciena plunged 16 1/16 to 80 5/8 after announcing the acquisition of privately-held Cyras for approximately $2.6 billion. The deal will dilute 2001 earnings of 70 cents by 19-22 cents.

ValueClick was unchanged at 4 11/16 after announcing it will acquire Z Media for about $11.7 million.

Loislaw.com soared 2 23/32 to 4 7/32 on news that it will be acquired by Wolters Kluwer for $4.3545 per share.

MP3.com slipped 9/32 to 3 3/4 after EMusic and its independent record label partners launched a copyright infringement suit against MP3.

Some technical comments on the market: Note: We are now including 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 market may be building in an easing bias or even a rate cut from the Federal Reserve, so be careful if the Fed doesn’t at least lean toward an easing bias today. The Nasdaq continues to attempt put in a bottom here, so let’s hope the Fed comes through with at least an easing bias. The Nasdaq could be forming an ascending triangle here, a bullish pattern, after the fourth touch of the lower trendline today. It may take some time to get back above 3000 for good, but it looks promising.

The S&P 100 has strong support around 685, and may be forming a triple bottom. Below that is 650 support. A gap at 689 on the S&P 100 and 1312 on the S&P 500 may need to be filled at some point.

The ISDEX found support at 404 today, above yesterday’s 403 low when it filled a gap at 406. 400 is strong support on the index, and if it holds that level, it too will form a higher low along with the Nasdaq.

The Dow is holding above 10,600, so it again has a bullish posture. The index could be forming an inverse head-and-shoulders, the latest pattern to predict a possible move above 11,000.

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