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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (31690)	2/22/2001 11:00:15 AM
From: stockman_scott	Respond to of 65232

Techs Fall on Brocade, EMC Warnings Thursday February 22, 10:39 am Eastern Time By Haitham Haddadin NEW YORK (Reuters) - Technology shares fell sharply in early morning trading on Thursday, adding to recent losses that took them near two-year lows, as downbeat sales forecasts from EMC Corp. (NYSE:EMC - news) and Brocade Communications Systems Inc.'s (NasdaqNM:BRCD - news) hammered the computer data storage sector. ``It is all part of the process of taking down all the sacred cows,'' said Prudential Securities analyst Larry Wachtel. The storage sector had been viewed as one of the last bastions of relative strength in an otherwise bleak technology sector. The technology-laced Nasdaq Composite Index (.IXIC) plunged 52.70 points, or 2.32 percent, to 2,216.24 after Wednesday's 2.13 percent drop to its lowest close since early March 1999. The Dow Jones industrial average (.DJI) was down 53.73 points, or 0.51 percent, at 10,472.85, pressured by technology components but with defensive issues like tobacco giant Philip Morris (NYSE:MO - news), which hit a new 25-month high of $49.00, helping keep a floor under the blue-chip index. The broader Standard & Poor's 500 Index (.SPX) was down 14.55 points, or 1.16 percent, at 1,240.72. EMC and Brocade were the most active shares on the New York Stock Exchange and Nasdaq respectively. EMC dropped $6.75 to $36.20 and Brocade plunged $9-5/16 to $35-3/8, and the pressure spread to peers. Brocade, which issued its financial results late on Wednesday, beat analysts' expectations but the company cut the year's sales forecast, saying computer storage customers were wary of the shaky U.S. economy. This was followed by a bombshell from EMC Corp, the world's No. 1 data-storage firm, which warned that the uncertain economy would slow the company's growth in 2001. The warning is an about-face for EMC, which has previously been untouched by blips in the economy. EMC said pockets of the economy have been challenged by a sharp drop-off in spending by Internet companies. But overall demand from large global companies continues to be strong, it said. Stocks tumbled on Wednesday amid uncertainty about the economy that was compounded by an unexpectedly sharp gain of 0.6 percent in the Consumer Price Index (CPI), which raised concerns that deep interest-rate cuts by the U.S. Federal Reserve may not be coming any time soon. ``Brocade is one more negative market leader that signals weakness for the tech market. It's losing a lot and that is hurting other storage makers,'' said Peter Coolidge, managing director of equity trading at Brean Murray & Co. EMC and Brocade were the latest in a long list of high-tech companies to warn that the future is not as bright as previously thought. The selloff hammered software developer Veritas Software (NasdaqNM:VRTS - news), which plunged $9-7/8 to $62-1/2. The shares of another Brocade peer, Emulex Corp. (NasdaqNM:EMLX - news) fell $2 to $28-3/4 and QLogic Corp. (NasdaqNM:QLGC - news) sank $6-1/4 to $34-5/16. Traders were also keeping an eye on events half way across the globe in Turkey, which is mired in financial turmoil. On the economic front, U.S. Jobless claims for the week ended Feb. 17 showed a rise to 348,000 after a downward revised 344,000 in the previous week. The increase is yet another sign of a slowing economy. In other news, Portal Software (NasdaqNM:PRSF - news), maker of telecommunications billing software, late on Wednesday posted earnings that beat estimates, but it warned first-quarter results would not meet expectations. Its shares fell $2-3/16 to $7-9/16, or 22 percent. ADC Telecommunications Inc. (NasdaqNM:ADCT - news), a telecom equipment maker, reported a slight rise in income that beat expectations, and warned about the impact of the U.S. economic slowdown through 2002. It rose 5/16 to $10-5/8. J.C. Penney Co. Inc. (NYSE:JCP - news) rose 30 cents to $13.95 after the nation's fifth-largest retailer reported a smaller-than-expected loss. JDS Uniphase Corp., (Toronto:JDU.TO - news; NasdaqNM:JDSU - news) the world's No. 1 supplier of fiber-optic components acquired Optical Process Automation Inc. Terms of the deal were not disclosed. JDS fell $1-3/16 to $30-1/2.