Was It Something I Said?

Geez, if I had known people were going to take those “beware the bear rally” comments so much to heart, I would have chosen my words a bit more carefully.

In Wednesday’s Morning Report, I cautioned that the four-day rally begun last Thursday should not be widely interpreted as the beginnings of a market comeback. Hardly a brilliant insight, just common sense. Judging from the subsequent ticker meltdown, however, investors didn’t need much persuading.

By the time Wednesday’s final bell sounded, the Nasdaq had fallen 6.0% to 1854, while the Dow — despite a late-afternoon rally — lost 1.6% to 9785.35. Both began the day within reach of two important levels — 2000 for the Nasdaq and 10,000 for the Dow. Reaching those marks might have provided fuel for further upward momentum.

Internet stocks took the biggest beating of all Wednesday, with four out of five ‘Net tickers losing value and internet.com’s Internet Stock Index, or ISDEX, tumbling 10.1%.

Of course, it wasn’t my warning that triggered the day’s huge selloff. Rather, it was warnings delivered after Tuesday’s bell from wireless handheld device maker Palm and fiber-optic equipment maker Nortel Networks , each of which advised investors to expect lower revenues and wide losses this quarter.

While Palm and Nortel may have received the most attention, a number of other Internet and tech companies delivered bad news Wednesday and earlier in the week. Here are some of the other recent warnings:

Internet polling and market research company Harris Interactive on Wednesday said it expected a net loss for its fiscal third quarter of 17 cents to 19 cents per share. The company previously had forecast a Q3 net loss of 16 cents. For Q4, HPOL said net loss also should be 17 cents to 19 cents, versus consensus estimates of 13 cents.

Computer data storage software vendor JNI said on Wednesday that Q1 profits will be 3 cents to 4 cents per share, well below analyst estimates of 13 cents.

DSL equipment maker Elastic Networks on Tuesday said Q1 revenues will be between $5.5 million and $6.5 million, versus an earlier quarterly estimate of $16 million.

Application management software provider NetScout said on Tuesday that pro forma EPS for its fiscal fourth quarter will be 1 cent to 3 cents, versus previous profit estimates of 14 cents per share.

Also Tuesday, Web consultant Viant said its Q1 loss will be 33 cents to 36 cents per share, far exceeding net loss estimates of 20 cents per share.

This wave of disappointing quarterly data is just beginning and will last through April and into May, when the Q1 reporting season winds down. Bottom line: Don’t count on stocks to rise with the spring flowers.

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