July 14, 2003 - The Nasdaq (first chart below) sure was an odd chart today: the gap up created a bullish island reversal, but the lack of change from the open created a potential evening star, which could mark a top if tomorrow is a down day. This is a big week for tech earnings, with Intel reporting tomorrow night, IBM on Wednesday and Microsoft on Thursday, so indecision is to be expected here. Support is 1734, and resistance is 1758, 1776 and 1800. Somewhat shakier is the S&P (second chart), which hit a fractional new high at 1015.41 before selling off into the close. Resistance is 1010 and 1015, and 990 is critical support. The Dow (third chart) has major resistance at 9352, and major support at 8975-9000. First supports are 9135 and 9030, and 9261-9278 is first resistance. The Transports (fourth chart) managed to form a "rising three methods" bullish continuation pattern over the last 5 days, but just barely with today's new closing high. Finally, at .47, the equity put-call ratio is again approaching the .45 danger zone.
Yahoo, Intel Extend Tech Rally by Paul Shread
July 14, 2003 - Yahoo's acquisition of Overture and a Merrill Lynch upgrade of Intel sent stocks higher on Monday.
The Overture buyout is the latest in a string of takeovers that have investors thinking that some stocks remain undervalued and that business confidence may be returning. And at a price-to-earnings ratio of 23, Yahoo isn't getting a bad price for Overture, which rose 12% on the news. Looksmart soared 25% on speculation that it could be acquired by MSN.
Intel climbed 3% after Merrill upgraded the stock to Buy from Neutral, saying that gross margins should improve over the next 6-8 quarters as the company moves toward mobile machines and 300mm technology, and cuts prices less aggressively in the desktop market. Intel reports earnings tomorrow night, and analysts expect earnings of 13 cents a share, a 39% improvement from the year-ago quarter.
The broader market gained on strong earnings from Citigroup and Bank of America , but finished well off its highs on a sell-off that was blamed on an erroneous sell program.
The Nasdaq rose 20 to 1754, the S&P 500 climbed 5 to 1003, and the Dow gained 57 to 9177. Volume rose to 1.43 billion shares on the NYSE, and 1.97 billion on the Nasdaq. Advancers led 19-13 on the NYSE, and 20-11 on the Nasdaq. Upside volume was 64% on the NYSE, and 79% on the Nasdaq. New highs-new lows were 361-4 on the NYSE, and 435-3 on the Nasdaq.
After the close, Rambus missed earnings estimates by a penny with 4-cent earnings.
During the day, JD Edwards climbed 1.3% after the Justice Department cleared the company's merger with PeopleSoft . Oracle slipped as it now faces a potentially higher price tag in its bid to takeover PeopleSoft.
Broadcom gained 5% on a new Fast Ethernet switch.
TiVo climbed 5% on a partnership with AOL .
McData and Network Appliance rose after they extended their partnership.
Sony surged 6% on a glowing Barron's cover story. If you'd bought it when we highlighted it back in April, you'd be up 42%.
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