Techs continue drag on Nasdaq
Index gives up nearly 54 points; heads toward 1,200
By Rex Crum, CBS.MarketWatch.com
Last Update: 6:06 PM ET July 23, 2002
"You've got ebola out there," said Bruce Lupatkin, general partner at North Bay Technology Partners in San Francisco. "Don't expect some dramatic bottom to be reached. This selling's going to burn itself out when it burns itself out."
The selling certainly showed no signs of burning out on Tuesday, as the Nasdaq Composite ($COMPQ: news, chart, profile) lost another 53.60 points, or 4.2 percent, to close at 1,229.05. In what has become a common refrain, the tech-heavy index closed at its lowest point in more than five years, when it ended trading on April 28, 1997, at 1,217.03.
Yet, despite the surface-level morbidity of the tech sector, money managers said now is not the time to discount what the market presents to investors with patience.
"The trend is tremendously negative right now and there is a lot of blood in the water," said Jeff Merriman, asset manager of Merriman Capital Management in Seattle. "But this uncertainty has also made for some juicy buying opportunities."
Merriman said the lack of investor confidence that is dragging the tech sector down may get a boost come Aug. 14. Beginning that day 945 CEOs and CFOs have to meet new Securities and Exchange Commission regulations and personally certify that their companies' quarterly and annual reports are complete and accurate. The guidelines apply to companies with annual revenue of at least $1.2 billion.
"Anybody who tells you what the market will do next you should run away from," Merriman said. "But we might at least see some more trustworthy and reliable information beginning next month."
Software
Several big-name tech companies fell to new 52-week lows, including Microsoft. Shares of the world's largest software company lost $3.30, or 7.1 percent, to close at $43.01. Since hitting a 52-week high of $70.62 on Jan. 9, Microsoft's (MSFT: news, chart, profile) shares have fallen 39 percent in value.
Among other software leaders, Oracle (ORCL: news, chart, profile) fell 43 cents, or 4.7 percent, to close at $8,80; Siebel Systems (SEBL: news, chart, profile) gave up 32 cents, or 3.5 percent, to end the day at $8.75; BEA Systems (BEAS: news, chart, profile) fell 81 cents, or 12.5 percent, to close at $5.67; and Check Point Software (CHKP: news, chart, profile) lost 71 cents, or nearly 5 percent, to finish at $14.22.
But it was Computer Associates that showed the biggest percentage loss on the day. Computer Associates (CA: news, chart, profile) lost $2.13, or 21 percent, to close at $8.08 after lowering it full-year revenue and earnings outlooks on Monday. On Tuesday, First Albany downgraded its rating on CA's stock.
The Goldman Sachs Software Index ($GSO: news, chart, profile) took it on the chin, losing 4.58 points, or 5 percent, to end the day at 87.86.
Lucent drags networkers down ... again
Shares of Lucent Technologies (LU: news, chart, profile) went through one of their ritualistic market beatings following another disappointing quarterly report from the telecom-equipment giant.
Lucent shares fell 45 cents, or 21.4 percent, to close at $1.65 after the company on Tuesday announced a ninth-straight quarter of losses and 4,000 new job cuts on Tuesday. See full story.
Among other networkers, JDS Uniphase (JDSU: news, chart, profile) fell 50 cents, or 15 percent, to close at $2.84; Ciena (CIEN: news, chart, profile) lost 55 cents, or 11 percent, to close at $4.43; Juniper Networks (JNPR: news, chart, profile) lost 65 cents, or 8 percent, to go to $7.48; and Cisco Systems (CSCO: news, chart, profile) lost 48 cents, or 3.7 percent, to close at $12.50.
Two bright lights among the networkers were Nortel Networks (NT: news, chart, profile), which gained 3 cents, or 2.7 percent, to close at $1.05, and 3Com (COMS: news, chart, profile), which gained 54 cents, or 13 percent, to reach $4.69 after announcing on Monday that it would drop its pro forma accounting practices.
The Amex Networking Index ($NWX: news, chart, profile) reflected the sorry state of networkers as it shed 6.83 points, or 5 percent, to close at 129.59.
Hardware
Big hardware companies remained in the red throughout the day with Apple Computer and Sun Microsystems falling to 52-week lows.
Apple (AAPL: news, chart, profile) lost 45 cents, or 3 percent, to close at $14.47 and Sun (SUNW: news, chart, profile) fell 8 cents, or 2 percent, to end the day at $3.98.
Other hardware shares closing down included IBM (IBM: news, chart, profile), which lost $1.45 a share to fall to $67.05; Dell Computer (DELL: news, chart, profile), down $1.03 to close at $22.74; Hewlett-Packard (HPQ: news, chart, profile), which lost 48 cents to end the day at $11.52, and EMC (EMC: news, chart, profile), which shed 6 cents to close at $7.08.
The Goldman Sachs Hardware Index ($GHA: news, chart, profile) lost 5.15 points, or 3.2 percent, to close at 157.45.
Semiconductors drop
A positive quarterly report on Monday from Texas Instruments (TXN: news, chart, profile) wasn't enough to help the semiconductor sector maintain early gains it made on Tuesday.
TI was one of the few gainers on the day, as its shares rose 9 cents, to close at $23.48. Triquint Semiconductor (TQNT: news, chart, profile) gained 50 cents to close at $6.72.
Decliners included sector leaders Intel (INTC: news, chart, profile) and Advanced Micro Devices (AMD: news, chart, profile), as well as Micron Technology (MU: news, chart, profile), Rambus (RMBS: news, chart, profile), Applied Micro Circuits (AMCC: news, chart, profile) and Vitesse Semiconductor (VTSS: news, chart, profile).
The Philadelphia Semiconductor Index ($SOX: news, chart, profile) lost 17.6 points, or nearly 5 percent, to close at 339.41.
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Rex Crum is a reporter for CBS.MarketWatch.com in San Francisco. |
