Tech lower, awaiting Fed action
Brown Bag Lunch
May 15, 2000
by Thomas Coyle
A case of the jitters ahead of the Federal Reserve's decision on interest rates drove technology shares prices lower in early trading Monday.
"We've got super Tuesday tomorrow in terms of the Fed and the CPI," Art Russell, a tech analyst with Edward Jones, told UpsideToday.
And since no one knows for sure if the Fed will increase rates by 25 or 50 basis points, investors are playing it safe.
"Not a lot of people are plunging in and investing their lives' savings," Russell said.
Index watch: At about 11:45 EDT, the Nasdaq composite index had lost 69.47, or 1.97 percent, to 3459.59.
Meanwhile, the Dow Jones industrial average was up, tenuously, 25.36, or 0.24 percent, to 10634.73, thanks to strength in the cigarette and paper sectors.
The Russell 2000 index of small- and mid-cap stocks had shed 5.92, or 1.21 percent, to 485.02; the Philadelphia semiconductor index had slipped 31.60, or 3.22 percent, to 950.55; and the Internet index was down 5.51, or 0.65 percent, to 838.05.
The all-stocks Wilshire 5000 was down 39.11, or 0.30 percent, to 13112.01.
Working away: Industrial production for April came out 0.1 percent higher than expected, and 0.9 percent above the figure for March. Capacity production stood at 82.1, higher than the 81.8 the market had been looking for.
La vida Lycos: Lycos (LCOS: +6 1/8, 60 1/4) gained on news that it may be acquired by Spanish Telefonica's TEF Terra Networks ADR unit in a stock deal worth about $10 billion.
Sector leaders: Bellwether tech share prices were mostly lower in early trading. Cisco (CSCO: -2 5/64, 57 55/64), IBM (IBM: -1 7/8, 102 9/16), Sun Microsystems (IBM -2 1/8, 79 3/8), AT&T (T: -3/4, 38), Lucent Technologies (LU: -7/8, 55 3/4), Oracle (ORCL: -1 9/16, 72 5/8), MCI WorldCom (WCOM: -1/2, 40 3/4) and Microsoft (MSFT: -7/16, 68 3/8) lost ground.
Eureka: Intel (INTC: -1 7/8, 113 1/8) hopes it has found a way to sell more chips. The semiconductor giant is supplying computer makers with dual processors for PCs, designed to help at-home stock traders compete on a more equal footing -- at least in terms of technology -- with professional traders.
On Tuesday Dell Computer (DELL: -2 3/64, 47 53/64) will unveil a home-trading personal computer that uses Intel's double Pentium processors at an e-investing show in Las Vegas.
PC stocks: In the rest of the PC sector Apple (AAPL: -6 3/16, 101 7/16) , Gateway (GTW: -2 1/4, 51 1/8), Compaq Computer (CPQ: -1/2, 26 5/8), Seagate Technology (SEG: -15/32, 44 9/16) and Palm (PALM: -5/16, 25 3/8) saw their share prices dip, partially on the back of gains on Friday.
Hewlett-Packard's (HWP: -1 3/4, 129 13/16) shares traded lower ahead of its earnings release on Tuesday.
Chips are down: It was rough going for the chip sector coming off gains posted on Friday. Applied Materials (AMAT: -2, 82 7/16), Rambus (RMBS: -9 5/16, 179 5/8), Micron Technology (MU: -1 9/16, 59 3/16), Advanced Micro Devices (AMD: -1 15/16, 83 3/4), and Atmel (ATML: -1 27/32, 37 17/32) traded lower.
General Semiconductor (SEM: -7/8, 17 1/2) lost its bounce after gaining in off-hours trading on the back of a bullish analyst meeting on Friday.
Semi stocks upgraded: Chip makers Applied Micro Circuits (AMCC: -6 7/8, 94 7/16), Conexant Systems (CNXT: -1 5/32, 42 25/32) and Vitesse Semiconductor (VTSS: -3 13/16, 46 11/16) all went to "strong buy" from "buy" in the eyes of Frost Securities.
Thomas Coyle is the markets reporter at UpsideToday.
Backflip this story
Dow Jones Industrial Avg. 10750.55 +141.18
S&P 500 1437.91 +16.95
NYSE Composite 651.95 +9.09
AMEX Composite 938.58 +2.37
NASDAQ Composite 3512.57 -16.49
Russell 2000 489.71 -1.23
30-year Treasury Bond 6.17 -0.03
last updated 05/15/2000 13:29
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