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B. Krishnakumar

THE sentiment at the American stock market was distinctly bearish during the week gone by. The flow of lacklustre quarterly performance from top companies stalled the two-week upward trend.

The fall last week was spear headed by the technology heavy weights Microsoft and IBM. Earnings warning from these companies dented market sentiment.

As a result, the benchmark indices logged sharp declines on Friday on the back of increased trading volume. The Dow Jones Industrial Average declined by 2.3 per cent while the S&P 500 lost 2.8 per cent. The Nasdaq Composite dipped by 4.9 per cent for the week. The near-term view for the index has now turned weak.

The recent price trend indicates further downside risk for the Nasdaq Composite Index. The index is at a critical juncture at this point in time. Technically, the 1319 mark would be the make or break level for the index. A drop below 1319 would negate the earlier short-term bullish outlook while a move above 1430 would have positive implications.

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