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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: DownSouth who wrote (22366)	2/10/1999 7:30:00 AM
From: ayn rand	Respond to of 77397

Knock, knock, knock'n at Net stocks Nail biting Net stock investors watch a 4th straight tumble By Bob Sullivan MSNBC Feb. 9 — Correction or collapse? That's the question on everyone's mind after most Internet stocks slid downhill for the fourth straight session on Tuesday. Even more unnerving — they seem to be gaining speed on the way down. It started with last week's news that price wars were hurting chipmakers like Intel and Advanced Micro Devices. On Tuesday, traders seemed spooked by USA Network Inc.'s purchase of Net portal Lycos, Inc. Maybe the bad news is over. Or maybe Net investors are just looking for an excuse to get out. “THE MARKET IS CONCERNED because it's inevitable that Internet stock prices are going to break, and when they go, it could be a severe enough blow to psychology to pull the rug out from under the market,” said Bill Meehan, chief market strategist at Cantor Fitzgerald. Investors punished Lycos after its sale to Barry Diller's USA Networks was announced — shares plummeted 33 points, or 25 percent, pulling the rest of the sector down with it. Also on the hit list: Yahoo Inc., which dropped 17 7/8; Amazon.com Inc., down 9 1/8; America Online Inc., an 11 point loser; eBay, which slumped 18 1/8; and Network Solutions Inc., which took a 26 1/8 point wallopping. In general, the entire tech sector suffered from the ramifications and ripples of the Internet stock selloff. The Nasdaq composite index, which sports an impressive array of top tier technology stocks — from Microsoft and Intel to Amazon, Yahoo and the latest crop of high-fliers — suffered its third largest point drop ever on Tuesday, losing 94.06 points, or 3.91 percent. It closed at 2,310.86, but that's still 118 points or some 5 percent above its 1998 closing level. WILD SWINGS FOR WILD STOCKS There's nothing new about the wild swings among Net stocks. In fact, this is the second significant dip since the beginning of the year. Nets pulled out of the first selloff on Jan. 22. Net bellwethers like Yahoo and Amazon are still above price “floors” set then, but technicians are worried that if Amazon drops below its recent low of 93 (it closed at 100 Tuesday), or Yahoo falls below its recent low of 126 (it closed at 140 3/4), these stocks might not stop falling for a long time. “If these stocks are still down in the first week of March, these stocks are going way down,” said Michael Murphy, editor of the California Technology Stock Letter. “Unless we get a bounce here fairly soon, you will see it absolutely cascade.” But not all analysts see the tooing and frowing as a bad sign. Morgan Stanley Dean Witter analyst Mary Meeker said a 25 percent correction in the area of Internet stocks “would be healthy.” Meeker, however, wasn't predicting such a dramatic pullback. “In my view, the wealth creation in this business will be greater than anyone has ever seen before, although only a few companies are likely to really excel,” she said. The spillover effect of the Net selloff was hard to ignore. The Nasdaq's bellwethers plummeted, too. Dell Computer Corporation (DELL), the Nasdaq's most active issue, lost 6 1/4 to 97-13/16. Microsoft Corporation (MSFT) ended down 5 3/16. Cisco Systems, Inc. (CSCO) fell 6 to 95 15/16 — it's down over 20 percent in the past week. And Intel Corp. dropped 6 11/16 to 125 5/16. Still, some tech investors managed to see a silver lining. “I think what you've seen in the stock prices is esentially a little bit of a breather after this big boom that we've had. I dont know if the S&P 500 goes up, down or sideways in 1999, but I feel good about the relative out-performance of the tech sector at the end of the day,” said Paul Meeks, Merrill Lynch senior portfolio manager.