Tech stocks end winning streak
By Mike Tarsala, CBS.MarketWatch.com
Last Update: 5:27 PM ET Nov. 15, 2001
NEW YORK (CBS.MW) -- The Nasdaq Composite nudged lower Thursday, ending the index's streak of closing higher for four straight sessions.
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The tech-heavy Nasdaq ($COMPQ: news, chart, profile) lost 2.62 points to 1,900.57. Shares of Cisco rose as the most heavily traded U.S. stock, although Intel (INTC: news, chart, profile) shares slid, and Lucent (LU: news, chart, profile) shares moved lower as one of the most heavily traded issues on the New York Stock Exchange.
September business inventories dropped 0.5 percent vs. the expected 0.3 percent decline. But sales fell faster than inventories, sending the inventory-to-sales ratio to a three-year high of 1.45.
Weekly initial jobless claims fell 8,000 to 444,000, a level that was less than the 469,000 that had been expected by economists polled by CBS.MarketWatch.com. But the number of continuing claims rose for an eight straight week and remains at an 18-year high.
With shares struggling to find direction, computer makers proved to be the best performing sector, a day after IBM (IBM: news, chart, profile) executives met with analysts. Big Blue's shares rose 40 cents to $114.75 after the company said it continues to take market share in its hardware, software and services businesses. President Sam Palmisano told analysts that the company sees more sales opportunities in high-end business integration. Management also said it sees the company's services pipeline in the U.S. increasing.
Other computer makers including Compaq Computer (CPQ: news, chart, profile) rose, posting a 7 percent gain. Storage computer-maker EMC (EMC: news, chart, profile) added 4 percent. The Goldman Hardware Index ($GHA: news, chart, profile) rose 0.8 percent.
Chip stocks went the opposite direction after equipment-maker Applied Materials' (AMAT: news, chart, profile) earnings fell short of expectations. Applied's stock lost 4 percent. Including one-time items, the company reported a fourth-quarter net loss of $82 million, or 10 cents a share. Analysts had expected earnings of 4 cents.
In the same quarter last year, Applied had a net profit of $664 million, or 77 cents a share. Excluding one-time charges, the company's fiscal fourth-quarter net income was $22 million, or 3 cents a share.
The largest chip equipment maker wasn't optimistic for the current quarter, telling investors that revenue could decline and that orders are expected to be flat to slightly below the previous quarter's level.
Many chip stocks, including Advanced Micro Devices (AMAT: news, chart, profile) and Texas Instruments (TXN: news, chart, profile) edged lower. It didn't help that analysts at Bear Stearns called chip valuations "fairly absurd," warning investors not to buy overpriced shares. The Philadelphia Semiconductor Index ($SOX: news, chart, profile) stayed near breakeven.
Networking issues showed some slight gains, with Alcatel (ALA: news, chart, profile), Ciena (CIEN: news, chart, profile) and Redback Networks (RBAK: news, chart, profile) shares moving higher. The Amex Networking Index gained 0.2 percent.
Lucent Technologies' (LU: news, chart, profile) shares lost 13 cents to $7.72. The sale price for Lucent's fiber-optic unit may end up 10 percent below the originally agreed upon price of $2.75 billion, according to The Wall Street Journal, citing people familiar with the situation. Analyst Steve Kamman at CIBC World Markets added that he remained concerned about the additional cash restructuring costs that Lucent may have to incur to complete the deal.
Software stocks fizzled out after posting early gains to end the day near breakeven. Shares of Microsoft (MSFT: news, chart, profile), and Computer Associates (CA: news, chart, profile) ticked higher. Oracle shares, lost 13 cents to $14.79. The Goldman Software Index ($GSO: news, chart, profile) lost 0.1 percent.
Novell (NOVL: news, chart, profile) shares lost 5 cents to $3.94 after the network-based software maker said it would cut 1,400 jobs, or 19 percent of its work force, in response to declining demand for its products, and expectations for a slow technology business recovery in 2002. The company also said it anticipates reporting fiscal fourth-quarter earnings of a penny a share, excluding non-recurring charges, while analysts surveyed by Thomson Financial/First Call had been forecasting break-even results.
Mike Tarsala is a San Francisco-based reporter |
