Is there something negative about CPQ this morning that I missed ??? Hardware stocks sink on Y2K news
By Mike Tarsala, CBS MarketWatch
Last Update: 12:25 PM ET Dec 27, 1999
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NEW YORK (CBS.MW) -- Shares of computer makers stumbled Monday
morning, after market data showed year 2000 concerns led to weakness in
the worldwide market for server computers in the third quarter.
The Goldman Sachs Computer Hardware Index ($GHA: news, msgs) fell 0.6
percent.
Sales of servers, which are the hardware brawn behind e-commerce
computer systems, fell 10 percent to $13.5 billion compared with third-quarter
1998, according to Framingham, Mass.-based market research firm
International Data Corp.
Despite the total market slide, top computer makers are gaining ground
against smaller rivals. The top five server vendors earned 71 percent of the
total server market revenues, up from 67 percent in the third quarter of 1998.
Dell (DELL: news, msgs) and Sun Microsystems (SUNW: news, msgs)
reported strong server sales, up 40 percent and 18 percent year-over-year
worldwide, respectively, according to IDC. Shares of Dell fell 1 1/16 to 51
5/8, while Sun fell 1/2 to 75 1/4.
Shares of IBM (IBM: news, msgs) rose 5/8 to 109 1/4. Silicon Graphics (SGI:
news, msgs) jumped 1/16 to 10. Compaq (CPQ: news, msgs) fell 7/8 to 27
7/8. Gateway (GTW: news, msgs) slipped 5/16 to 69 7/8.
Shares of storage company Seagate (SEG: news, msgs) rose 1 1/8 to 47 3/4
after Morgan Stanley raised the stock to "outperform" from "neutral." Storage
system maker EMC (EMC: news, msgs) fell 1/2 to 100 5/8.
Chip stocks fared slightly worse than their computer counterparts. The
Philadelphia Semiconductor Index (SOX: news, msgs) fell 2.3 percent, while
the Goldman Sachs Semiconductor Index (GSM: news, msgs) dropped 1.5
percent.
Shares of LSI Logic (LSI: news, msgs) shed 1 5/16 to 63 3/16. National
Semiconductor (NSM: news, msgs) fell 1 1/8 to 43 7/8. Novellus Systems
(NVLS: news, msgs) sank 3 3/8 to 120 1/8. Texas Instruments (TXN: news,
msgs) dropped 3 to 104 1/2.
There were a few bright spots. Shares of Newbridge Networks (NN: news,
msgs) rose 3 1/16, or 14 percent, to 24 9/16.
And shares of Tegal (TGAL: news, msgs) rocketed 2 25/32, or 82 percent, to
6 1/8 after being mentioned in a CBS.MarketWatch.com column. Tegal is a
California semiconductor equipment maker that uses plasma-etch systems.
Some big computer chip makers are evaluating Tegal's patented system,
reported columnist Thom Calandra.
Mike Tarsala is a reporter for CBS MarketWatch.
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