Today's session contained one large firework and a few other duds, if we can continue with the Fourth of July theme for one more day.
news of the day was
plans to buy
JDS Uniphase will give 3.8 shares of stock for every share of SDL, giving the deal a value of $41 billion before the start of trading today. But with JDS Uniphase closing down 15 1/16, or 13%, at 101 1/8, acquisition value dropped to around $35.7 billion.
Weakness in JDS Uniphase was blamed for losses in the
today. It finished down 42.91, or 1.07%, to 3980.29.
TheStreet.com Internet Sector
index fell 23.09, or 2.9%, to 784.02.
Much of the Internet sector's direction could depend on
earnings report tomorrow, though our own George Mannes claims that
that will be reported next week could be equally as important to Net investors. Both suffered losses today. Yahoo! eneded down 6 1/2, or 5.6%, at 110, while DoubleClick finished off 4 1/4, or 12%, at 31 11/16.
Other duds included
, which finished down 9 5/8, or 8%, at 108 1/2, though without any news behind the losses.
finished down 2 1/4, or 5.5%, at 39.
Among the leading gainers,
closed up 5 3/4, or 9%, at 68 1/8.
initiated coverage of the stock with a strong buy rating and a $100 price target. Analyst John Graves wrote that the stock represented the "purest market proxy for high-growth mobile Internet services."
, which gained 15% on Friday on news that it had won a contract with
, was up another 7 7/8, or 6%, at 134 13/16 today.
2:06 P.M.: Analyst Sees Signs of Hope
Sometimes even quiet sessions can tell you something. After early weakness, the Nasdaq was trading near unchanged of late, suggesting potential for a continuation of Friday's rally later today.
In recent trading, the Nasdaq Composite was up 4 to 4027.
TheStreet.com Internet Sector
index was down 9 to 798. What are technical analysts saying? Mostly positive things, though with qualifiers.
Dick Dickson, technical analyst with
Scott & Stringfellow
sees today's price action as profit-taking from Friday's rally, though the path of least resistance remains higher and key resistance areas should be tested. Dickson is more focused on 4150 in the Nasdaq, which is above a trendline he has drawn from the Jan. 7 low of 3711 and the Jan. 31 low of 3748. That trendline held resistance on May 1 and June 27, he said, and comes in somewhere around 4100 at this time, but he would like a clean break to 4150.
Dickson said he thinks it might be a time to gamble on the upside, but with the bigger high tech names. He said that while the Nasdaq and the
Inter@ctive Week Internet Index
are both near breakout levels, both TheStreet.com Internet Sector index and the
Goldman Sachs Internet Index
are nowhere close to breakout levels so strength in the Nasdaq is likely concentrated in the big-cap Internet stocks rather than smaller ones. And, he said, a break of that 4150 level could take the Nasdaq up to 4500 in a hurry. He noted that the Nasdaq went from 4500 to 3800 back in April and expects a move to the upside could be just as fast.
Dickson also said today's price action was positive in that the Nasdaq absorbed the early selling and did not extend losses, suggesting a push higher late in the day. He said he would have liked to have seen more follow-through to Friday's gains, "but you take what you can get in this market."
Robert Dickey, director of technical research with
Dain Rauscher Wessels
, points to the 4064 closing high from June 21 as a level the Nasdaq needs to get above on a closing basis to suggest a more sustained summer rally. A clear break of that level, he says, provides potential to move up an additional 5% to 10% during the next two months.
However (isn't there always a however), Dickey notes that a breakout cannot be counted on with the market having had so many head-fakes of late. Though if it did occur, he said it can be chased, "as it would be a significant change to the neutral range of the recent trend." Finally, he noted that momentum has had a hard time following through without a news catalyst. The market could get this momentum should earnings be as good as expected.
10:32 a.m.: JDS Uniphase Battered on Big Deal; Tech Stocks Languishing
There will be no
headhunting here at
, just straight fastballs down the middle so you, the reader, can hit a dinger.
In early action today, the
Nasdaq was down 12, or 0.3%, to 4011.
TheStreet.com Internet Sector
index was off 4, or 0.6%, to 803.
Grabbing many of the headlines was the huge deal involving
. JDS Uniphase, which will give 3.8 shares of stock for every share of SDL, was getting hammered, down 13.2%. SDL was up 9%. Our crack staff at
joint newsroom took a closer look at the acquisition in an earlier
Elsewhere, the market was mixed as it moves into earnings season. Among stocks on the move,
, which tumbled 25% on Friday on news that
over BroadVision for its next Web site release, was up 6.6% today. Art Technology was off 1.5% after trading to an all-time high of 114 earlier in the session.
, which has done underwriting for BroadVision, said the decline was an "overreaction." Analyst Lilly Bahramipour wrote that while American Airlines represented "a very visible account" for BroadVision, it was not significant from a revenue perspective. She wrote that she expects BroadVision to report good second quarter results on July 20 and that management was expected to make positive announcements, such as customer wins, over the next few weeks that could be a catalyst for the stock.
Goldman also put out a note on
after Korean wireless operators last week indicated that they were leaning toward using cellular phone technology from
. Goldman analyst Mary Henry wrote that a decision had not been made yet and even if the other technology was chose there was "no likely impact" on near-term revenue or earnings per share for Qualcomm. She did write that Korea represented a third of Qualcomm's revenues and adoption of competing technology "would create more competition for Qualcomm." Goldman has not done underwriting for Qualcomm. It was up 0.7% in recent trading.
, which surged around 15% Friday on news that it had won a contract with
, was up a further 3.8% today.
Donaldson Lufkin & Jenrette
indicated that the deal was positive from a number of perspectives and raised its price target on the stock to 150 from 110. Analyst Hasan Imam wrote that the deal reduced Sycamore Networks' customer concentration, which he said was a major concern for the company in the past. He also wrote that the deal validated Sycamore's next-generation optical product line. DLJ has not done underwriting for Sycamore Networks.