How can a boutique PC company losing money on a poorly designed PC sink the tech market? It makes no sense.
NW
Nasdaq falls over 3 percent as Apple warning sinks techs
NEW YORK, Dec 6 (Reuters) - The tech-dominated Nasdaq
market slid more than 3 percent in late afternoon trading on
Wednesday after Apple Computer Inc.'s <AAPL.O> warning of a
quarterly loss continued to bite into the entire tech sector.
Blue-chip shares were not immune to the Apple effect, with
such technology heavyweights as International Business Machines
Corp. <IBM.N> and Hewlett-Packard <HWP.N> taking a beating.
The Nasdaq Composite Index <.IXIC> was down 105 points, or
3.66 percent, at 2,783. The slide came just a day after the
Nasdaq catapulted more than 10 percent to rack up its biggest
gain ever. Computer chip maker Intel Corp. <INTC.O> led the
tech-dominated index lower with a $4-1/2 drop to $31-1/2.
The Dow Jones industrial average <.DJI> fell 272 points, or
2.50 percent, to 10,626, weighed down by IBM's drop of $7-3/4
to $95-5/8 and H-P's loss of $2-15/16 to $32-1/16. The broader
Standard & Poor's 500 Index <.SPX> slid 30 points, or 2.21
percent, to 1,346.
"With the Apple news, of course there's concern that there
are some more disappointments to play out," said Richard
Cripps, chief market strategist at Legg Mason in Baltimore.
Financial stocks also got slammed by worries about
dwindling profits after Bank of America Corp. <BAC.N> said its
fourth-quarter results would miss Wall Street estimates because
of higher credit costs and weak capital markets activity.
Apple's chief executive Steve Jobs pointed to the softening
economy as one of the contributors to his company's expected
loss. Apple, which warned after Tuesday's closing bell of a
quarterly loss, dropped more than 16 percent, or $2-7/8, to
$14-1/8. It had dropped as low as $14 earlier in the session,
slamming to its lowest level in about two years.
Some investors also cashed out profits from the
market'srally on Tuesday after Federal Reserve Chairman Alan
Greenspan hinted that the Fed may soften the blow of a slowing
U.S. economy with interest-rate cuts.
Stocks had rocketed higher Tuesday, driven upward by
speculation the Fed could act as early as next year, as well as
the perception that the drawn-out battle for the White House
may be nearing an end.
(Elizabeth Lazarowitz, Wall Street Desk, 212 859 1607))
REUTERS
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