Techs hurt by sector downgrade, Sun
By Deborah Adamson, CBS.MarketWatch.com
Last Update: 4:40 PM ET May 24, 2002
NEW YORK (CBS.MW) -- Tech stocks ended Friday on a sour note, hurt by a downgrade of the chip-equipment sector and by weakness in shares of Sun Microsystems.
The Nasdaq Composite Index ($COMPQ: news, chart, profile) was down 2 percent to 1,661.49. The Nasdaq 100 ($NDX: news, chart, profile) slid by 2.6 percent while QQQ (QQQ: news, chart, profile) lost 79 cents to $31.24.
The Goldman Sachs Software Index ($GSO: news, chart, profile) fell 2.2 percent, as did the Amex Networking Index ($NWX: news, chart, profile).
The Philadelphia Semiconductor Index ($SOX: news, chart, profile) gave up 3.3 percent while the Goldman Sachs Hardware Index ($GHA: news, chart, profile) slid 2.8 percent. See Hardware Stocks.
The Goldman Sachs Internet Index ($GIN: news, chart, profile) was down 1 percent.
Weighing on the Nasdaq was a lowering of the chip-equipment sector by Goldman Sachs to a "market weight" from a "market overweight," accompanied by rating downgrades of every stock in its coverage universe. The brokerage cited the group's recent stock outperformance and uncertainty in industry end-demand.
Among the stocks downgraded were Applied Materials (AMAT: news, chart, profile), KLA-Tencor (KLAC: news, chart, profile), Teradyne (TER: news, chart, profile), Novellus Systems (NVLS: news, chart, profile) and ATMI (ATMI: news, chart, profile).
Shares of Applied Materials was down 7 percent to $23.80; KLA-Tencor slid by 5 percent to $54.43; Teradyne was down 2 percent to $27.51; Novellus gave up 3.5 percent to $46.18 and ATMI was down 8 percent to $28.33.
But Merrill Lynch and UBS Warburg leaped to the defense of Novellus, saying that they expect the company to stick by its second-quarter financial targets when management holds a mid-quarter update conference call after the market's close next Tuesday.
Sun Microsystems (SUNW: news, chart, profile) took a hit after it conceded late Thursday that orders for the June quarter would be modestly lower on a sequential basis, overshadowing a reaffirmation that it will turn a quarterly profit. Sun's stock slid 7 percent to $6.86, the second most active issue on the Nasdaq with 57 million shares exchanging hands.
In other news, Adaptec (ADPT: news, chart, profile) said that Chief Operating Officer Robert Schultz is leaving at the end of June. Robert Stephens, the company's president and CEO, will assume Schultz's duties, and a replacement will not be named. Shares were down 5 percent to $12.92.
Intel (INTC: news, chart, profile) said Thursday it will buy a unit of New Focus Inc. (NUFO: news, chart, profile) for $50 million in cash. The unit specializes in optical transceiver production technology, with Intel planning to license to New Focus several products using the laser technology. Intel dipped 2.5 percent to $28.66 while New Focus shares were up 7 percent to $3.25.
Also Thursday, McData (MCDTA: news, chart, profile) (MCDT: news, chart, profile) said CFO Janet Cooper will be replaced by Ernest Sampias as of June 1. The networking and storage company also affirmed its second-quarter financial outlook of revenue "roughly comparable" to the prior quarter's $64.5 million and a per-share loss in a range of 6 cents to 8 cents. Shares were down 2 cents to $7.90.
Elsewhere, communications chipmaker Marvell Technology (MRVL: news, chart, profile) reported a first-quarter net loss of $30.9 million, or 26 cents a share, on revenue of $98.8 million. Excluding charges, Marvell earned 8 cents a share, a profit about in line with expectations. Marvell's shares were down 9 percent to $35.24.
Novell (NOVL: news, chart, profile) earned 3 cents a share, excluding charges, during the second quarter, reversing a 3-cent loss seen during the fiscal 2001 period. Analysts had expected breakeven results, according to Thomson Financial/First Call. Revenue reached $274 million, up from $241 million last year. Shares dipped 2.4 percent to $3.71.
In software: Microsoft (MSFT: news, chart, profile) was down 3 percent to $53.26. Oracle (ORCL: news, chart, profile) was down 5.5 percent to $8.85.
BEA Systems (BEAS: news, chart, profile) slid by 2.5 percent to $11.05. Siebel Systems (SEBL: news, chart, profile) dropped 4 percent to $20.10. I2 Technologies (ITWO: news, chart, profile) slid 4 percent to $3.22.
In networking: Cisco Systems (CSCO: news, chart, profile) was down 2 percent to $16.57. Juniper Networks (JNPR: news, chart, profile) slid 1.4 percent to $10.08. Nortel Networks (NT: news, chart, profile) gave up 1 percent to $2.56. Ciena (CIEN: news, chart, profile) was unchanged at $6.08. Tellabs (TLAB: news, chart, profile) was down 2.7 percent to $9.61.
Deborah Adamson is a reporter for CBS.MarketWatch.com in Los Angeles. |
