Internet infrastructure stocks dropped for a second straight day in the wake of cautionary comments from Cisco Systems, and Net stocks were battered on worries about online retailers' financial health.

As if that wasn't enough, traders also awaited the outcome of the closest presidential election in more than 100 years, which may not be decided until 5 p.m. tomorrow. Investors appeared to be pricing in a Bush victory, as drug, tobacco and healthcare stocks rose.

The ISDEX dropped 51 to 606, and the Nasdaq fell 184 to 3231. The S&P 500 lost 22 to 1409, and the Dow declined 45 to 10,907. Volume rose to 895 million shares on the NYSE, but declined to 1.67 billion shares on the Nasdaq. Decliners led by 14 to 13 on the NYSE and 25 to 13 on the Nasdaq. The Producer Price Index will be reported in the morning, and Dell Computer will report earnings after the close tomorrow. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our after hours trading site.

47 of 50 ISDEX stocks finished the day lower, and the dotcom weakness could continue tomorrow: After the close, 24/7 Media missed earnings estimates, Internet Capital Group announced massive layoffs, and Digital Island and Engage warned.

The announced demise yesterday of Pets.com and MotherNature.com pressured shares of e-tailers. Merrill Lynch analyst Henry Blodget expressed concern about the ability of three stocks to raise the financing they will need to continue, and cut their ratings to Neutral: eToys, off 3/4 to 2 19/32, Webvan, down 5/16 to 1 3/8, and Buy.com, which lost 9/32 to 1 21/32.

Amazon.com, down 2 15/16 to 34, fell on a Wall Street Jorunal report that the SEC is scrutinizing the company's treatment of stock deals with other Internet companies.

Cisco, down 4 9/16 to 52 3/16, finally joined in the selling it inspired yesterday on inventory buildups and comments that equipment spending could slow. Broadcom dropped 24 15/16 to 151 9/16, PMC Sierra lost 20 1/8 to 107 3/4, Vitesse dropped 9 3/8 to 63 11/16, JDS Uniphase lost 6 5/8 to 67 1/2, and Juniper fell 23 13/32 to 187 9/32. Technical note: Broadcom may have broken out of a head and shoulders top yesterday, with downside potential to 125.

eBay lost 4 7/8 to 51 13/16 after announcing layoffs. Art Technology Group fell 9 1/4 to 46 1/16 on concern about the strength of the company's business.

VerticalNet dropped 3 9/16 to 24 1/4 on a USB Piper Jaffray downgrade on concern over the company's acquisition of SierraCities.com. PurchasePro lost 4 3/16 to 22 1/8 after Prudential dropped the stock from its Select List.

America Online lost .56 to 57.05 on news that the Federal Trade Commission is demanding new concessions ahead of a vote tomorrow on the company's merger with Time Warner. AOL Latin America gained 1/4 to 6 5/8 on a better-than-expected loss.

Oplink Communications dropped 2 1/8 to 23 9/16 despite beating estimates by 3 cents with a breakeven quarter. TMP Worldwide slipped 3/8 to 71 3/4 despite beating earnings estimates. PFSWeb lost 15/16 to 1 3/8 after missing estimates and lowering forward guidance.

Some technical comments on the market: Note: We are now including charts in the technical market commentary. If you can't get the charts via the e-mail newsletter version, try this link: http://www.afterhourstrading.com/column.html

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The broken rising wedges or bear pennants in Cisco and the Nasdaq 100 seem to have some force behind them. Based on its breakdown two days ago, Cisco has downside potential to 40-45.

The Nasdaq 100 has downside to 2700-3000 based on its breakdown yesterday. The Nasdaq and Nasdaq 100 may have failed to take out their recent highs around 3500, continuing a cycle of lower highs, which is also a negative. A lower low, below 3026 on the Nasdaq and 2958 on the Nasdaq 100, would be bearish. The head and shoulders pattern that could forming in the index over the last month could signal an ultimate low in the 2500 range.

The S&P 500 continues to form a much bigger rising wedge, with an apex at least a few weeks away. Even if it continues to form, the index could have quite a bit of upside before the boundaries converge, but a retest of 1300 may be in the cards a couple of months down the road. The index broke 1420 support today; the lower wedge boundary at 1390 is now critical support. To the upside, the entire 1420-1460 range is tough resistance for the S&P, since it was a big consolidation area back in September.

The ISDEX was finally dragged down by the Nasdaq today. To the downside, 600, where downtrend and uptrend lines are converging, should provide support. Below that is 560 support. The ISDEX faces tough resistance at 675; three previous rallies have failed there. A break above that level would be a real positive.

The Dow faces tough resistance at 11,000. However, given the breakout out of a bull flag and the distance from the previous consolidation, a move to 11,400 is not out of the question. Note the downtrend line that could provide resistance around 11,250. To the downside, we'd like to see the Dow stay above its diamond apex at 10,850, or at least not go below that point by more than 2%.

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