To: Venkie who wrote (35871 ) 4/16/2001 12:33:11 PM From: stockman_scott Read Replies (1) | Respond to of 65232 Techs Hit by Uncertain Earnings Picture Monday April 16, 11:39 am Eastern Time By Elizabeth Lazarowitz <<NEW YORK (Reuters) - High-tech shares grappled with losses in late morning trading on Monday as a cloudy corporate profit picture helped take the shine off the sector, while blue-chip stocks hovered near unchanged. Technology stocks had soared last week as investors, fearful of missing a major rally, hopped on the buying bandwagon and helped the Nasdaq market rack up its second-best week ever. Tech shares limped lower on Monday, however, led by the world's No. 1 computer chip maker Intel Corp. (NasdaqNM:INTC - news) after Morgan Stanley cut the company's earnings outlook, citing, in part, weakening demand for semiconductors in the communications sector. ``We don't think corporate managers have any better visibility now that they did three or six months ago,'' said Thomas McManus, equity market strategist for Banc of America Securities in New York. ``We don't put a lot of credence into the upbeat news that may hitting the market concerning the outlook.'' The technology-laced Nasdaq Composite Index (.IXIC) was down 41.81 points, or 2.13 percent, at 1,919.62, after losing some 3 percent earlier in the morning. Intel, one of the gauge's most heavily traded shares, led the retreat with a drop of $1.92 to $26.20. The Dow Jones industrial average (.DJI) was up 7.22 points, or 0.07 percent, at 10,134.16., underpinned by defensive shares like drugs and healthcare, which are sought in times of uncertainty. The broader Standard & Poor's 500 Index (.SPX) was off 0.26 percent at 1,180.44. ``The uncertainty still prevails. We're not out of the woods,'' said Dick Schmaltz, director of investment at J. & W. Seligman Inc., referring to the Nasdaq retreat after a 14-percent gain during last week's holiday-shortened trading period. Markets were closed on Friday for the Easter weekend. ''I don't see last week as a cataclysmic change.'' Networking giant Juniper Networks (NasdaqNM:JNPR - news) was hit, but off its lows, with its shares down $1.87 to $48.60. Last Thursday, the company reported a seven-fold gain in income, but warned about its 2001 earnings and revenues. Semiconductor shares took it on the chin after Morgan Stanley lowered its investment rating on a number of communications chip makers, including Broadcom (NasdaqNM:BRCM - news) and lowered its forecast for Intel's earnings in this year and the next. Broadcom fell $3.76 to $31.62, while the Philadelphia Stock Exchange Index (.SOXX) dropped 4.30 percent. The computer-chip sector had soared last week on an upgrade of the group by Salomon Smith Barney. Bank and brokerage stocks were weaker after the three top U.S. banks posted lower earnings because of loan and investment losses in the slowing U.S. economy. Dwindling hopes for very aggressive interest-rate cuts by the Federal Reserve also threw cold water on the sector, analysts said. Citigroup Inc. (NYSE:C - news), the biggest U.S. financial services company, posted a 7 percent fall in profits, just squeaking by consensus forecasts, as investment losses and weak revenues from advising companies on new stock offerings offset growth at its consumer operations. Its shares were down 34 cents at $46.96. First Union Corp. (NYSE:FTU - news), the No. 6 U.S. bank holding company, said its profits fell 30 percent, in line with Wall Street expectations, because of larger loan losses and weak money management fees. It also announced it agreed to buy Wachovia Corp. (NYSE:WB - news) for $12.6 billion in stock. First Union was off $1.57 at $30.35. Bank of America Corp. (NYSE:BAC - news), the third-largest U.S. bank holding company, posted a 17 percent drop in quarterly profits, hurt by bad loans and losses on investments, and its shares slipped 3 cents to $52.92. This week will be one of the busiest of the current corporate reporting period, with earnings expected from Intel and computer maker International Business Machines Corp. (NYSE:IBM - news).>>