Stocks rose Wednesday morning, as investors interpreted a weaker-than-expected report on new home sales as a sign that the economy is slowing.
The ISDEX gained 14 to 707, and the Nasdaq tacked on 55 to 3740. The S&P 500 added 10 to 1448 and the Dow climbed 75 to 10,682. Volume rose to 450 million shares on the NYSE and 680 million on the Nasdaq. Advancers led 13 to 11 on the NYSE and 18 to 16 on the Nasdaq. The big economic report for the week is Friday’s July employment data. For earnings reports, visit our earnings calendar and reported earnings.
Sapient was the day’s big winner after reporting second-quarter earnings of 23 cents a share, 3 cents better than estimates, and announcing a 2-for-1 stock split. The stock rocketed 21 7/8 to 125 3/4.
Sequoia Software gained 1 1/8 to 11 5/8 after beating estimates by 6 cents with a 26-cent loss.
GoAmerica beat estimates by a penny with a 22-cent loss and announced an alliance with Dell Computer
. The stock gained 3/4 to 11 3/8.
Click Commerce reported a loss of 1 cent a share, 4 cents better than estimates. But the stock fell 3 11/16 to 26. Salon.com
beat estimates by a nickel with a 36-cent loss, and the stock added 1/32 to 1 17/32. Viador
beat estimates by 3 cents with a 29-cent loss, but the stock slipped 11/16 to 10 3/8.
SciQuest.com gained 5/32 to 10 1/8 after reporting a loss of 35 cents a share, 3 cents better than estimates.
Egghead.com was unchanged at 2 3/8 despite warning that third-quarter revenues will be below the second quarter.
Juno continued to fall a day after the company lowered forward guidance. Chase H&Q cut the stock to Market Perform from Buy. Juno fell 1 1/2 to 7 3/4.
S1 continued to decline a day after missing earnings estimates, falling 2 9/16 to 15 9/16 on downgrades from Legg Mason, ABN Amro and USB Piper Jaffray.
MicroStrategy gained 2 5/16 to 22 5/8 on news of a new Chief Financial Officer.
Interwoven climbed 2 3/16 to 66 15/16 on news that Target Stores has selected the company’s content management platform to power Target.com.
SonicWall gained 3 3/16 to 84 1/8 on news of a 2-for-1 stock split.
SpeechWorks bolted 8 5/8 to 65 3/8 on its second day of trading. For more on the IPO, click here.
Commerce One found support right at its uptrend line at 40 and bounced 2 5/8 to 43 5/16. Vignette
, which broke its uptrend last week, gained 4 5/8 to 33 11/16 on news of an alliance with Arthur Andersen.
Some technical comments on the market: The Dow looks pretty good here, having broken out of an inverse head and shoulders pattern in the 60-minute chart this morning. But the Nasdaq and S&P 500 continue to look like they are forming bear flags or pennants here, potentially signaling that the next big move may be down. This kind of zig-zagging rally, up one day and then down the next, is how these patterns are formed. The Nasdaq has run into resistance at the very bottom of its large consolidation from June and July; an awful lot of money that went into the market the last two months is now under water, giving the index a lot of overhead resistance here. And given the Nasdaq’s break of a rising wedge last week, the index has downside potential back to 3042 if it is unable to mount a more impressive advance. Critical support is 3550-3585. To the upside, resistance began around 3750-3766 Monday and is again posing
resistance today. Next up is the 3820-3830 level, and then the 200-day moving average at 3875. The ISDEX rallied once again off our critical support of 693, trading as low as 682 this morning. A close below 692 would be a warning sign. To the upside, the ISDEX is likely to run into resistance at the lower boundary of the rising wedge it broke last Friday; that boundary is now around 735. The broken wedge gives the ISDEX potential to return to 560, its May low. To the upside, above 730 is 790 resistance. Above that, the ISDEX turned back recently at 840, just below its 50% retracement level of 845. The Dow and the S&P pushed through 10,620 and 1440 resistance this morning, and are now flirting with 10,700 and 1450. The S&P 500 also broke a bearish rising wedge last week, with potential downside to 1361. Critical support is 1390, the index’s October 1998 uptrend line. A break of that trendline could carry the index to 1170 or lower, so we do not want to violate that line. The Dow turned back Friday after testing the lower boundary of its bearish diamond pattern (10,464, but we’ll continue to use 10,200-10,300 because of strong support in that range and the requirement of a 3% break of a major pattern). A break of that line could carry the Dow as low as 8,500. The upper boundary of the Dow’s bearish diamond pattern is 11,000. The Dow’s recent rally was halted at 10,875.
