Investors were showing some restraint midday after yesterday's huge rally, perhaps with the knowledge that they have been burned too many times in the recent past after it appeared the market was shaking off the bearish malaise.
In recent trading, the
was up 20.64, or 0.6%, to 3480.12, having traded on both sides of unchanged.
TheStreet.com Internet Sector
was up 8.14, or 1.0%, to 824.50.
In his morning commentary written ahead of the opening, Dick Dickson, technical analyst with
Scott & Stringellow
, wrote that yesterday's rally had the appearance of short-covering and bottom-fishing, "neither of which is usually considered serving as a good basis for a sustained rally." Dickson wrote that, while he was not concerned about the light volume seen with yesterday's move, he was concerned about "selective leadership," and that it was natural for such a bounce in tech stocks since they were the most oversold.
Dickson wrote that, if buyers failed to come back into the market today, "chances increase that yesterday represented an oversold bounce and prices will devolve back into a trading range waiting for Friday's unemployment numbers and hopefully a sense of direction for stocks."
Bob Dickey, director of technical research with
Dain Rauscher Wessels
, also was taking a cautious approach to whether yesterday's rally represented anything meaningful.
"There is no way to accurately gauge how low the Nasdaq may go," he wrote, "but with each bounce many investors expect the next uptrend to resume. Instead, these bounces have turned out to be nothing more than feeble rallies during the correction period."
Dickey added that the Nasdaq has had two major legs to the downside, "and often these corrections come with three major waves before they are through. The recent break of the 3300 level makes it likely that there is another sharp move lower to come. The long-term support on the Nasdaq is in the 2600-2900 area from the trading range of last summer and fall, when several months were spent in that range prior to the fantastic rally. With sentiment seeming to be so complacent, it would make sense that the index could fall that low before the dip-buying strategy was abandoned."
In order for the market to be bullish again, Dickey said that the Nasdaq must breach 4,000, which was the most recent bounce high. "Until then or after a more classic bottoming pattern the Nasdaq remains technically in a correction," he wrote.
Net stocks were relatively mixed. Among stocks that were trading higher,
was up 3 3/8, or 11.3%, to 33 3/8;
was up 1 7/8, or 6.7%, to 29 7/8; and
was up 5 13/16, or 7.8%, to 80 5/8.
On the downside,
was off 2 7/8, or 4.5%, to 61 1/8. And
was down 1 1/4, or 5.8%, to 20 3/8. Ted Brisco, who was promoted to president of the Web-based question-and-answer service just two months ago, is
leaving the company to become chief executive of
Play Stream Media Group
, a privately held Internet broadcaster.