Weak Economic Data Weigh On Stocks

Stocks fell Friday in light pre-holiday trade on a host of weak economic reports.

The ISDEX http://www.wsrn.com/apps/ISDEX/ lost 6 to 281, and the Nasdaq fell 30 to 2251. The S&P 500 dropped 15 to 1277, and the Dow fell 117 to 11,005, barely holding the important 11,000 level. Volume dried up to 967 million shares on the NYSE, and 1.36 billion on the Nasdaq. Decliners led 16 to 13 on the NYSE, and 19 to 18 on the Nasdaq. For earnings reports, visit our earnings calendar at http://www.wsrn.com/apps/earnings/internet.xpl and reported earnings at http://www.wsrn.com/apps/earnings/ireported.xpl. For after hours quotes and news, visit our after hours trading site at http://www.afterhourstrading.com.

As expected, first quarter GDP was revised downward to 1.3% from 2.0%. Durable orders and Michigan consumer sentiment were both weaker than expected. Homestore.com slipped .80 to 29.83 on softening home sales.

ADC Telecom , off 1.69 to 8.60, and Ditech , down 6.57 to 9.96, fell after missing estimates and guiding estimates lower.

Blue Martini plunged 1.11 to 4.15 after denying an IBM takeover rumor.

Openwave added .60 to 45.38 after holding 40 support yesterday.

TiVo continued to soar on news of a patent win, up another 2.79 to 11.29.

Oracle , which reports earnings next month and is expected by analysts to issue an earnings warning before then, fell .79 to 16.51 after JP Morgan said field checks are not finding much good news for the company.

PeopleSoft rose 1.77 to 44.95 on bullish comments from Lehman Brothers.

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So much for yesterday’s rally and a pre-holiday trading session today. At least the volume was light. The indexes ended the week on a poor note: the Dow (first chart), S&P 500 (second chart) and Nasdaq 100 (third chart) all ended the week back below their downtrend lines, with the Dow closing right on important 11,000 support. The Nasdaq (fourth chart) closed right at the important 2252 level. The good news is that Tuesday is a turn date, so the indexes could head back up again, but those weekly closes are not pretty, so some follow-through selling next week is possible. And all four indexes are beginning to show signs of rising wedges (the blue lines), a potential sign of a bear market rally. Nothing definitive, but something to keep an eye on, and there should be at least a little more upside. The Nasdaq 100 looks particularly weak, though, having failed to clear its January bottom of 2087; it is worth noting that it was the only index showing signs of weakness in January’s rally.

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