For the second straight day, a strong open on Wall Street faded by the end of the day.

The ISDEX http://www.wsrn.com/apps/ISDEX/ slipped 1 to 196, and the Nasdaq lost 22 to 2037. The S&P 500 declined 7 to 1164, and the Dow gave back 62 to 10,197. Volume declined to 1.3 billion shares on the NYSE, and 2.1 billion on the Nasdaq. Decliners led 16 to 14 on the NYSE, and 20 to 16 on the Nasdaq.

After the close, AOL delivered a better than expected warning, Gateway warned, Altera preannounced a charge and in-line results, BMC raised guidance, and Newport said it will beat earnings estimates but miss or meet revenue numbers.

Qualcomm broke down on lukewarm comments from CS First Boston (see chart in commentary below).

PeopleSoft rose on positive analyst comments and takeover speculation.

Network Appliance plunged on earnings concerns.

Drugstore.com soared on a bullish conference presentation.

Extreme Networks rose on earnings optimism.

Some technical comments on the market:

Two straight days of "gap and trap" action on the Nasdaq. Nothing conclusive either way in the charts, however, since breakouts are generally holding, and so is resistance. The S&P 500 (first chart) held last week's breakout around 1158-1160; that is important support here. But the index continues to struggle at tough resistance and its very important 50-week exponential moving average, and the S&P 100 (second chart) continues to struggle at 600 resistance, another critical level. The Dow (third chart) held its breakout around 10,175. Tough resistance for the Dow is 10,331-10,342, its 40-month moving average and 61.8% retracement of its all-time high. On the Nasdaq (fourth chart), 2035 is important support, and 2081 is resistance. One negative sign for the techs is Qualcomm (fifth chart), which had one big breakdown today and may be headed for a retest of its lows. Finally, here's a piece worth reading by Morgan Stanley economist Stephen Roach on why the economy may have another leg down in it: http://www.morganstanley.com/GEFdata/digests/20020107-mon.html#anchor0. In fact, the odds seem to favor it.