Nasdaq started off the day with a rally, but couldn't maintain it. By midafternoon, its tech components lost earlier gains and it fell into the red. About a half-hour before the close, the Comp struggled toward positive territory, but then slid even further into red. While the index managed to end the day off its low, it was still firmly on the downside, off 46.84, or 1.2%, to 3849.51.
TheStreet.com Internet Sector
index was 4.94, or 0.62%, lower to 793.30.
helped sink the index, but so did some unusual suspects, including
PRI Automation plummeted about 40%, or $16.81, to $25.88, after the semiconductor industry supplier warned of lower-than-expected fourth-quarter earnings. The company, which provides automation systems and software to the semiconductor industry, said it sees fourth-quarter net, excluding items, slightly above break-even. The 13-analyst estimate called for earnings of 52 cents. PRI cited manufacturing, capacity and supply chain problems as reasons for the shortfall.
The warning sparked several actions from
Credit Suisse First Boston
Morgan Stanley Dean Witter
SDL, which agreed to merge with
, suffered. It fell $19.44, or 5.7%, to $324.50. In a research note, Credit Suisse First Boston said that buying shares of SDL is an "expensive way to purchase" JDS Uniphase. JDS Uniphase was down $6.56, or 6%, to $103.19.
Meanwhile, energy stocks were the big winners today, with
up $14.41, or 9.1%, to $171.97;
, up $11.13, or a whopping 27%, to $52.50; and
, up $9.75, or 12.2%, to $90. Plug Power was also getting some lift ahead of its analyst meeting Thursday, when the company is expected to update its progress in moving its fuel cell closer to commercial production.
2:02 p.m.: Tech Stocks Holding Gains
Technology stocks were maintaining gains at midday, but were not running away on the upside. Nor were they giving much indication that the selling pressures that have punished the market of late have disappeared.
In recent trading, the
Nasdaq was up 30.2 to 3926.5.
TheStreet.com Internet Sector
index was up 14.85 to 813.09.
, our own James Cramer was spinning a tale of caution, in part because of rising oil costs. We pay attention when he speaks cautiously because he is notoriously bullish. Here's what he was saying -- but you'll have to pay up to get all of his commentary.
"At my firm, we are creatures of what the companies tell us, not the charts, and not the brokers and not the strategists. In the last 10 days we have spoken to or heard from a tremendous number of companies in this economy. These companies are in every nook and cranny of the economy. The only ones not worried about the current short-term conditions are companies in oil service. Those are the only ones."
He went on to write: "Unless oil comes down precipitously in the next few weeks, we will have no choice but to make a negative bet on this market. Oil will hurt the fourth-quarter numbers for just about every company we deal with. Those not hurt by oil will be hurt by the weak euro. The universe of stocks that we can pick from on the long side will get smaller and smaller. We don't arrive at this posture idly. We still want to buy tech weakness and sell tech strength. We are, however, finding it incredibly hard to find companies worth owning away from technology. We haven't gotten more negative; the companies we talk to have gotten more negative for us. So, we wait for a ramp into expiration so we can trim our holdings. We are lean enough that we can take some pain here. We can wait for better prices to sell. But to ignore that something has changed for the negative would be to stick our heads in the sand, as so many did in 1990. We want to keep our heads up and our eyes open. Can't do that in the sand."
We also pay attention to John Roque, vice president with
Arnhold and S. Bleichroeder
, who was focusing on the technical condition of
and its potential implications on the Nasdaq. In a morning note, Roque wrote that the continued inability of Cisco to close above 70 in June, July, August and September told him that "something is rotten in the state of Cisco." As a technical analyst, Roque wrote that he would "let the pros figure out what is awry, but for our money, Cisco must hold above 60." He indicated a close below 60 would risk a test of the May low at 50.
As for the Nasdaq, Roque notes there is immediate risk to the 3790 level, with the next support at 3500 level. And he would expect the Nasdaq to work its way to its May low of 3042.66 should Cisco close under 60.
Roque also took a peak at a few high-flying Internet stocks,
. He notes that along with Cisco, those three stocks "are poster children for either limited Nasdaq downside or more serious Nasdaq downside."
Regarding Ariba, he noted that the stock is up more than 200% since its May low of 49. It has rallied right up into resistance at its March high of $183.34. "We don't think Ariba chopped up again, but it is reasonable to believe there is risk in the stock to 120," he wrote. It was lately up 1.8%.
Roque wrote that BEA Systems was up 141% since its April low ($25.50) and has rallied right up into resistance at its March high ($78.88). "Again, we don't expect BEA Systems to get smashed, but we believe there is risk to the high 40's." It was up 2.1% today.
Finally, he remarked that i2 Technologies was up 125% since its April low ($69) and rallied through its intra-day high of 188 on Sept. 5, near resistance from March ($223.50). He said support for i2 looks good at 150. Its upward sloping 50- and 200-day moving averages should provide some cushion, "but rallies should be sold because we believe i2 is unlikely to make a new high without a correction unfolding first. Risk to 140." It was climbing 5.4% today.
Ventro Sees Interest from Investors
was up 6.6% lately on news from two of the B2B firm's online exchanges.
, a Ventro-run exchange for the foodservices industry, said it had signed exclusive distributor agreements with
Gordon Food Service
Separately, Ventro's Chemdex unit announced a partnership with the
to make it easier for small and mid-sized businesses to get connected to its life-sciences exchange. Integration problems have plagued Ventro in the past. The EC Company specializes in connecting small and mid-sized businesses to exchanges.
But those two announcements might not have been the only things driving the stock. Speculation that the company may be bought out has driven the stock higher for weeks. Last week, Ventro canceled a meeting with analysts and its presentation at the
Robertson Stephens Internet Conference
, citing various reasons.
wrote a story about Ventro's
Analysts didn't buy its explanation, though, and a press report speculating that
would acquire Ventro soon gain credibility among them. Just yesterday,
Banc of America Securities
analyst Mark Gulley issued a note titled "Could the Hunter Become the Hunted?" He rates the stock a strong buy. His firm has not performed underwriting for the company.
wrote about whether investors believe Ventro is
up for grabs .
10:57 a.m.: After a Rough Patch, Tech Stocks Climbing Back
J-E-T-S blah, blah, blah. What could be worse? First, having to listen to Dennis Miller babble all night on
Monday Night Football
, then having to put up with a Jets' fan as your cubicle mate?
At least the market was behaving better.
In early trading, the
Nasdaq was up 38.4 to 3934.7.
TheStreet.com Internet Sector
index was up 9.29 to 807.53. And in honor of the Jets and Dedric Ward's one-armed catch late in the game, this entire report is being typed with one hand.
At the beginning of this confessin seasion, a warning was rocking one Internet stock.
was lately down 36.5%, after saying it would miss third quarter estimates.
NetCreations, which provides email marketing services, said it expects revenues for the third quarter between $14 million and $15 million and earnings of 4 cents to 6 cents a share. That compares to the
First Call/Thomson Financial
estimate of an 11-cent gain, though that estimate comes from only one analyst.
Company CEO Rosalind Resnick said revenues had been adversely affected by the decline in marketing-related expenses associated with its business-to- consumer dot-com customers. But she added that she was confident business was on track for the fourth quarter, and the company was beginning to see demand from traditional brick-and-mortar marketers that are beginning to do business online.
Staying in roughly the same space, shares of
were up 4.4%. The online advertising agency held an analysts' day yesterday .
Credit Suisse First Boston
analyst Rich Petersen had positive things to say about the event. He noted that DoubleClick's new product pipeline looked strong, with email products having a combined 500 customers that were generating revenues. Second, he noted the company has made "significant progress" with large, well-capitalised traditional marketers, which will drive the growth of Internet. Recent new client wins include
. Finally, while Petersen said he expected "very modest" upside to third quarter numbers, he anticipated a strong fourth quarter based on seasonality, the introduction of new products and several client wins.
Shares of FreeMarkets
were down 0.3%. The company said today it had signed an agreement with Microsoft
to provide Microsoft access to its B2B eMarketplace. A FreeMarkets spokeswoman said the deal was a pilot program, something FreeMarkets has done in the past with numerous customers before signing them on for longer contracts. Financial terms were not disclosed.
Senior writer Joe Bousqin contributed to this report.