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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (40992)	12/20/2000 9:34:08 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Tech Stocks Hit 18-Month Low By Haitham Haddadin NEW YORK (Reuters) - The Nasdaq stock market plunged to an 18-month low on Wednesday as investors dumped technology stocks on worries of slowing profit growth in the once-high flying sector. The steep decline, which also hit blue chips, came a day after the U.S. Federal Reserve warned the U.S. economy risked facing a slowdown. The Fed on Tuesday left short-term interest rates unchanged but signaled its readiness to cut them in future to stop the economy from moving into a recession. Adding to the heat were a batch of corporate profit warnings, and downgrades on high-profile technology companies, including Nasdaq bellwether Cisco Systems (NasdaqNM:CSCO - news), and International Business Machines (NYSE:IBM - news), the world's largest computer company. ``It's not a pretty sight at all,'' said Donald Berdine, chief investment officer at PNC Advisors. ``There is still concern on most people's minds about how weak or how rough the economy will be next year.'' The Nasdaq Composite Index (^IXIC - news) plunged 164.96 points, or 6.57 percent, to 2,346.75, back to where it was at the end of May 1999. Nasdaq, which added to hefty losses on Tuesday, is now off more than 50 percent from its March high. The blue-chip Dow Jones industrial average (^DJI - news) was down 206.66 points, or 1.95 percent, at 10,377.71, dragged lower by IBM. The broader Standard & Poor's 500 Index (^SPX - news) fell 35.16 points, or 2.69 percent, at 1,270.44, its worst level in more than a year. Some 798 stocks hit new lows for the year on Nasdaq, where nearly five stocks fell for each one rising. The damage was more notable in the tech sector as many stocks remain overvalued, despite their pullback from year-highs, especially considering the likelihood of economic slowdown. Wall Street powerhouse Merrill Lynch soured on IBM and computer boxmaker Hewlett-Packard Co. (NYSE:HWP - news), cutting their investment ratings and warning clients it saw companies buying fewer computer systems from them. Reuters Photo Both shares fell sharply on the New York Stock Exchange (news - web sites), hitting new 52-week lows at $84-7/8 and $29-1/2, during the session, and putting the heat on the Dow gauge. IBM lost $5-1/16 at $85-1/16, and HWP $1-11/16 at $29-5/8. Cisco Systems led Nasdaq's fall. The Internet gear maker, which was Nasdaq's most actively traded issue, touched a fresh year low of $36-3/16 for a decline of 13 percent after Merrill Lynch cut its investment rating, blaming a slowdown in technology spending. Investors' mood darkened further after a batch of warnings about disappointing profits from a number of companies overnight or early in the day, including Dow component International Paper Co. (NYSE:IP - news), which edged down $1-13/16 to $37-11/16 on the Big Board. ``Every day you are getting new downgrades and (target) price cuts that add fuel to the downside fire,'' said Arnie Owen, managing director of capital markets at Roth Capital Partners. ''It's end-of-season tax selling and at the same time you have earnings fears.'' Among key tech indices, the Philadelphia semiconductor index (^SOXX - news) tracking the computer chip makers like Intel Corp (NasdaqNM:INTC - news) sank 5.8 percent. The S&P Computer Networking index (^SPLANS - news) fell 12 percent on the losses by Cisco, off $5-5/16 at $36-7/16, and Network Appliance (NasdaqNM:NTAP - news), off $4-3/4 at $55-3/8. Juniper Networks (NasdaqNM:JNPR - news), a Cisco rival, shed $12-3/4 at $101. Investors parked their money in defensive utilities and pharmaceutical stocks, which are among the year's good performers. Helping limit the Dow losses were hefty gains in drugs giants Merck & Co. (NYSE:MRK - news) and Johnson & Johnson (NYSE:JNJ - news), which helped send the Pharmaceutical index (^DRG - news) 1.71 percent higher to 447.91, within sight of its year-high at 442.32. The Dow Jones Utility Average (^DJU - news) rose 1.51 percent at 401.07, inching closer to its all time highs set in November.