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Strategies & Market Trends : Trader J's Inner Circle -- Ignore unavailable to you. Want to Upgrade?

To: Canuck Dave who wrote (25613)	1/6/2000 12:38:00 PM
From: ColleenB	Respond to of 56535

Thursday January 6, 12:05 pm Eastern Time Nasdaq drops after tech sector profit warnings By Kristin Roberts NEW YORK, Jan 6 (Reuters) - Nasdaq resumed its harsh descent early Thursday, falling more than 2 percent in early trading as profit warnings from some top technology companies gave investors another reason cash out of the sector. The Nasdaq composite index (^IXIC - news) dropped 2.35 percent, or 91 points, to 3,786. On Wednesday the market measure pared substantial losses late in the trading day to close off 24 points at 3,877.54. With Thursday's decline, the Nasdaq index is down 6.9 percent from its high of 4,131.15 Monday. Many analysts had been expecting a pull-back in tech shares after a stellar performance last year. A 10 percent drop, often defined as a correction, would pin the composite index at 3,718.04. Nasdaq has dropped as much as 8.5 percent in recent days. ``Obviously you have a lot of professionals with very large gains who upon seeing that Gateway announcement said maybe this is a good time to take some profits and get in at lower levels,' said Rick Meckler, senior managing director at Liberty View, Jersey City, N.J. Profit warnings, including one from computer-seller Gateway Inc.(NYSE:GTW - news), ahead of the upcoming quarterly earnings reporting season began to litter the market, affecting entire sectors. Chip giant and Dow component Intel Corp. (NasdaqNM:INTC - news) fell 2-5/8 to 81 and Dell Computer Corp. (NasdaqNM:DELL - news) dropped 2-1/8 to 47-7/16. Both stocks were pressured by the downward drive of Gateway's stock on the New York Stock Exchange after it issued a profit warning after the bell on Wednesday. Gateway's shortfall was caused by Intel's failure to produce more of its fastest chips. Since Dell is the biggest user of Intel's fast chips, it could crimp Dell's quarter as well, analysts said. The broader market pushed forward and the Dow Jones industrial average (^DJI - news), including two Nasdaq names, rose 74 points to 11,198 while the Standard & Poor's 500 index (^SPX - news) gained 1 point to 1,403. The technology sell-off was again broad-based. The Nasdaq 100 index (^NDX - news) of top stocks lost 2.4 percent, or 84 points, to 3,423. Microsoft Corp. (NasdaqNM:MSFT - news), which alone accounts for roughly 12 percent of the Nasdaq composite, fell 1-7/8 to 111-7/8. MCI Worldcom (NasdaqNM:WCOM - news) was the most active Nasdaq stock. It lost 3-5/16 to 47-15/16 after Salomon Smith Barney lowered its 2000 earnings estimates and revenue growth forecasts. Salomon, one of MCI Worldcom's most bullish fans, said it still views the company's growth as unmatched by any large competitor. Salomon reiterated its buy rating on the stock. Nasdaq's retailers were also beaten back after reporting December sales figures. Urban Outfitters Inc. (NasdaqNM:URBN - news) fell 8-1/2 to 14-7/8 and was Nasdaq's biggest percentage loser. Restoration Hardware Inc. (NasdaqNM:RSTO - news) fell 1-7/8 to 5 after its sales figures and a profit warning. Software companies also slumped. BMC Software (NasdaqNM:BMCS - news) lost 1-5/8 to 47-15/16 after forecasting disappointing results. Analysts from four Wall Street firms followed the news with downgrades and cuts to their share price targets. Internet stocks were broadly lower and TheStreet.com's Internet index (^DOT - news) fell 29 points, or 2.68 percent, to 1,078. The Dow Jones Internet index (^DJINET - news) lost 9 points, or 2.39 percent, to 384. Yahoo! Inc. (NasdaqNM:YHOO - news) extended losses, dropping 13-1/2 points to 397. On the upside, the biotechnology sector advanced and the American Stock Exchange's biotech index (^BTK - news) gained 2 points, or 0.67 percent, to 366. The Cobalt Group (NasdaqNM:CBLT - news) also surged, rising 14-1/4 to 124-9/16 after saying it would create a Web site that pushes the automotive service company into the hot business-to-business electronic-commerce sector.