Technology stock decline tapers off
By Mike Tarsala, CBS.MarketWatch.com
Last Update: 4:49 PM ET Sept. 18, 2001
NEW YORK (CBS.MW) - The post-attack tech stock slide eased Tuesday, as share buybacks and a benign inflation report helped curb investor losses.
The Nasdaq Composite ($COMPQ: news, chart, profile) lost 24.47 points, or 1.5 percent, to 1,555.08, compared with a 115-point slide on Monday. The large-cap Nasdaq 100 Index ($NDX: news, chart, profile) dropped 2.2 percent.
The inflation report brought buyers to the table early, before a late-day tech stock sell-off. Prices paid by U.S. shoppers rose 0.1 percent in August, the Labor Department said. Economists had been expecting an inflation gain of 0.3 percent, according to a CBS.MarketWatch.com survey. See full story.
Cisco Systems (CSCO: news, chart, profile), Intel (INTC: news, chart, profile) Sun Microsystems (SUNW: news, chart, profile), Dell Computer (DELL: news, chart, profile) and Applied Materials (AMAT: news, chart, profile) gave ground in heavy trading.
Looking to Oracle
But Oracle added some stability as one of the most actively traded stocks. Its shares gained 3 percent, even though executives said they expect no growth in fiscal second-quarter profit compared with last year. Shares of Oracle (ORCL: news, chart, profile) rose 37 cents to $11.38.
The company also forecast a 15 percent decline in software license sales. Oracle cited a continuing decline in corporate spending on information technology during the economic slowdown.
"We don't think things are recovering," said CEO Larry Ellison. "We are anticipating that things will get slightly worse." See full story.
Companies that announced programs to buy back their stock saw shares rise, including Borland Software (BORL: news, chart, profile), up 8 percent, and Bottomline Technologies (EPAY: news, chart, profile) up 7 percent.
Also, Yahoo (YHOO: news, chart, profile) repurchased 4.96 million of its shares from Softbank America for $55 million. The private transaction had been announced previously. Softbank remains the largest shareholder of Yahoo with about a 20 percent stake. Yahoo shares lost 7 percent.
Networking leads
Among tech issues, networking stocks proved to be the best performing sector. Lucent shares (LU: news, chart, profile) rose 19 cents, or 3 percent, to $5.74. Nortel (NT: news, chart, profile) gained 6 cents to $5.06. Shares of Alcatel (ALA: news, chart, profile), JDS Uniphase (JDSU: news, chart, profile) and Corning (GLW: news, chart, profile) slipped, however. The Amex Networking Index ($NWX: news, chart, profile) declined 1.5 percent.
Metromedia Fiber Network (MFNX: news, chart, profile) shares stood out among the big gainers. The company's shares rose 18 percent after the company received an extension on $150 million in financing until Oct. 1. The company also said it had received an extension of the commitment letter for $235 million in vendor financing until Sept. 19.
If the Metromedia Fiber can't close its financing round, the broadband networking company said it would need to seek bankruptcy protection.
Hardware stocks reversed early gains. IBM (IBM: news, chart, profile) shares added $3.06, or 3 percent, to $96.40. But Sun Microsystems (SUNW: news, chart, profile) shares lost 7 percent, and Dell Computer (DELL: news, chart, profile) dropped 4 percent.
Hewlett-Packard (HWP: news, chart, profile) rebounded from heavy losses Monday, gaining 18 cents to $16.20. CEO Carly Fiorina defended the company's planned purchase of Compaq Monday at a technology conference in Europe, telling them that the merger is an offensive move - not a defensive one.
"Trust me, this team is determined and motivated to prove the skeptics around this combination wrong," Fiorina said to attendees.
Chips hold
Chip stocks showed pockets of strength. Rambus (RMBS: news, chart, profile) shares rose $1.11 or 17 percent, to $7.76, the day after it signed a technology licensing pact with Intel. Shares of Intel, meanwhile, lost 12 cents to $23.47.
Many other chip stocks fell, however. Shares of Analog Devices (ADI: news, chart, profile) dropped 11 percent. ST Microelectronics (STM: news, chart, profile) shares lost 8 percent. The Philadelphia Semiconductor Index ($SOX: news, chart, profile) fell 6.3 percent.
Software shares lagged the hardware industries, as shares of Siebel Systems, BEA Systems and Commerce One lost ground. The Goldman Software Index ($GSO: news, chart, profile) slipped 3.1 percent.
Mike Tarsala is a San Francisco-based reporter for CBS.MarketWatch.com. |
