Stocks sold off Friday on downgrades to chip equipment stocks and lukewarm comments from Sun Microsystems. Fears of war with Iraq also weighed on the market.
As of noon Eastern time, the Dow was off 80 points, the Nasdaq was down 30 and the S&P 500 was 8 points lower.
Sun Microsystems fell 7% despite reaffirming guidance. Investors interpreted some of the company’s comments to mean that business remains tough.
Novellus , Applied Materials
and KLA-Tencor
fell after Goldman Sachs downgraded the chip equipment group on an uncertain outlook.
Novell climbed 3% after beating estimates.
McAfee climbed 2% on an upgrade.
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.
An unusual pre-holiday sell-off on a day that almost always carries an up bias. If any of today’s jitters have to do with terrorism fears, Monday could be an up day if there are no attacks this weekend. But the bigger picture remains weak since the rally topped out a week ago. The Nasdaq (first chart below) and S&P 500 (second chart) have been unable to reclaim the critical resistance levels of 1696 and 1100. 1670 and 1640 on the Nasdaq and 1074-1080 on the S&P are important support. The S&P 100 (third chart) has been unable to reclaim the important 548 level, and Intel (fourth chart) has been repeatedly rejected at the neckline of a head and shoulders top. The Dow (fifth chart) failed to retake the critical 10,220-10,250 resistance level. Given that 10,220 is also the average cost of the June Dow futures, some big money may be selling at that level, a bearish sign for June if it continues. 10,100 is important support on the Dow. Below that, 10,000 and 9900 come into play. And finally, an interesting paper from the San Francisco Federal Reserve Bank released today pegs current fair value on the S&P 500 at 876. Here’s the link submitted by an alert reader: http://www.frbsf.org/publications/economics/letter/2002/el2002-16.html.
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