To all-Here is explanation of why nazdaq is down 32 today and Tellab's is down 2 29/32. Every so often,the semiconductors have a glut and take a hit in their share prices.THIS OF COURSE HAS NOTHING TO DO WITH TELECOMMUNICATIONS EQUIPMENT COS.
Intel ignites tech rout
Merced delay leaves the entire sector
open to attack Monday
June 1, 1998: 6:15 p.m. ET
Dow climbs,
techs plunge -
June 1, 1998
Intel delays
Merced chip -
May 29, 1998
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NEW YORK (CNNfn) - A major selloff in shares of
Intel lowered the boom on the rest of the technology
sector Monday.
After the close of trading Friday, the chip giant
announced it will delay the release of its high-end
Merced processor for six months.
And shareholders paid mightily for that delay.
Intel (INTC) stock dropped 3-7/16 to close at 68.
That's just 5/8 of a point above its 52-week low. So
far this year, Intel is now down more than three
percent.
The Intel dive knocked the Nasdaq Composite
for a loop. It lost 32.05 to close at 1,746.82.
Wall Street firms registered their disappointment
with a slew of downgrades. BT Alex. Brown cut its
rating on Intel to "market perform" from "buy," while
Cowen & Co. lowered it to "neutral" from "long-term
buy." Gruntal maintained its "neutral" rating on the
stock.
Lehman Brothers and Salomon Smith Barney
trimmed their earnings estimates for Intel.
The only bright spot: Morgan Stanley reiterated its
"strong buy" rating on Intel.
Semiconductor analyst David Wu of ABN
AMRO said the Merced delay is important
psychologically.
"It's a series of stumbles that Intel has had over
the last 12 months," Wu said. "They had the
inventory correction among the PC makers. And the
pricing competition. The sub-$1,000 PC got away
from them and they had to play catch-up, so a
number of things have happened."
The delay of Intel's fast new chip put the squeeze
on PC stocks Monday because that will push back
their plans to roll out new high-end computers.
Hewlett-Packard (HWP) is helping Intel
develop the Merced chip. It lost 15/16 to close at
61-3/8.
Compaq Computer (CPQ) shed 9/16 to
26-13/16. IBM (IBM) slipped 1/4 to 117-1/4.
And Dell Computer (DELL) took a big hit,
dropping 4-3/32 to 78-5/16. Not only was it a bad
day for PC makers, but Michael Dell registered to
sell a million shares of the company's stock. That
added fuel to the selloff.
Sun Microsystems (SUNW) stands to benefit
from the Merced delay, because the company is
working on its own 64-bit chip. Sun rose 1-3/8 to
41-7/16. Morgan Stanley upgraded the stock to
"strong buy."
Cognex Corp. (CGNX) warned its earnings for
the rest of this year will fall below year-ago levels. It
lost 3 to 16 in heavy trading. The company makes
machine vision systems, equipment that allows
computers to see.
Internet stocks were swept lower in the rout.
Yahoo! (YHOO) lost 5-1/8 to 104-3/8.
Amazon.com (AMZN) fell 2-1/2 to 85-5/8. Excite
dropped 3 to finish at 51-3/8
But you have to put up with this irrational behavior every once in a while.
DAVE DICKERSON |
