Chip, computer stocks dip after new Taiwan quake
PALO ALTO, Calif. (Reuters) - Semiconductor and large computer-company stocks fell Monday after an earthquake with a preliminary reading of 6.9 on the open-ended Richter scale struck the island of Taiwan, the second major temblor in that region in less than two months.
The Philadelphia Semiconductor Index, a major barometer of chip stocks, tumbled shortly after 1 p.m. EST (1800 GMT), when news of the quake first broke. The index then recovered and closed down 0.31, or 0.06 percent, at 555.52.
Shares of International Business Machines Corp., the world's largest computer maker, declined 1 1/2 to 96 3/4 in composite New York Stock Exchange trading, while Hewlett-Packard Co. stock initially fell as low as 73-5/8 but then closed up 7/16 at 74 5/8.
While the Sept. 21 quake, which measured 7.6 on the Richter scale and killed more than 2,100 people, prompted companies as large as Hewlett-Packard to say that fourth-quarter results could be hurt, this one may not have as large an impact, analysts said.
The quake was centered about 28 miles northeast of Taiwan in the Pacific Ocean, state seismologists said. The quake would be considered strong, but U.S. Earthquake Information Center director Waverly Person said the agency had received no initial reports of damage.
''We really don't have an idea yet of any damages,'' said Davin Oswald, a spokesman for the Semiconductor Industry Association, a trade group.
Taiwan is home to 28 semiconductor plants and accounts for more than half of the world's semiconductor contract manufacturing business. Most motherboards, which house the chips critical to PCs, are made in Taiwan.
''People are selling first, asking questions later,'' said Larry Wachtel, an analyst at Prudential Securities. ''I don't know if this one was centered in the manufacturing belt where the last one hit -- we need more information first.
Intel Corp. stock fell 1 7/16 to 76 on the Nasdaq, Texas Instruments Inc., the largest maker of so-called DSP chips used in cellular phones and other devices, tumbled 2 3/4 to 87 while the stock of PC maker Gateway Inc. declined 1 1/4 to 64 13.16.
The Dow Jones industrial average lost 81.35 points, or 0.76 percent, for the day to close at 10,648.51. The Nasdaq rose only 1.22 points, or 0.04 percent, at 2,967.65 after reaching a high of 2,997.90 early in the day, putting it within striking distance of the the 3,000 level.
The S&P semiconductor equipment index fell 7.9 points, or 1.92 percent at 396.01.
sjmercury.com |
