Sellers Again Slam Shares of Tech Firms

Technology stocks’ bloody bear market worsened Monday as investors dumped the shares ahead of some key quarterly earnings reports this week.

The broad market also lost ground, with the Dow Jones industrials off 17.34 points to 5,043.78 in moderate holiday trading.

Tech shares, the market stars of last spring and summer, have been plummeting for the last few months as a growing number of the companies have warned of slowing sales and earnings gains.

On Monday, fears of another wave of disappointments in this week’s fourth-quarter corporate earnings reports prompted more investors to bail out of the tech sector--even though many of the stocks are already off 40% or more from their peak 1995 prices.

Semiconductor leader Intel slumped 3 1/4 to 53 3/8 in heavy trading. It will report fourth-quarter results after the market closes today. Microsoft, which will report earnings Thursday, dropped 3 1/4 to 82 1/2.

“Rumors are flying that [tech companies] are not going to meet their numbers,” said Glenn Parker, Nasdaq trading chief at brokerage Hambrecht & Quist.

Investor jitters were worsened when another brokerage downgraded its rating of Micron Technology, a leading maker of computer memory chips. Micron’s stock slid 2 1/8 to 30 7/8 after brokerage Robertson Stephens cut its 1996 earnings estimate for Micron to $6.50 a share from $7, citing in part the firm’s decision to scale back some chip production.

Micron stock had traded as high as 94 3/4 in last summer’s tech stock mania. A week ago it was at 40.

Dragged down by tech shares, the Nasdaq composite index tumbled 19.66 points, or 2%, to 988.57. It has now fallen 7.6% from its record reached last year.

“There are a lot of nervous Nellies out there,” said John Swinford, a money manager at Raborn & Co. in Delray Beach, Fla., referring to tech investors.

But recent weak earnings reports from such firms as Motorola, Apple Computer and Symantec suggest that investors have good reason to be nervous.

After the market closed Monday, DSC Communications, a producer of telecommunications equipment, warned that its fourth-quarter results will be below expectations.

Another company, computer wholesaler Merisel, said after the market closed that it expects to report a quarterly loss, which the firm called “extremely disappointing.” It said weaker-than-expected sales growth is partly to blame.

In the broad market, losers topped winners by 13 to 10 on the New York Stock Exchange and by 21 to 14 on Nasdaq. Trading volume slowed to 307 million shares on the Big Board because some investors took the Martin Luther King Day holiday off.

The bond market was closed for the holiday.

Among Monday’s highlights:

* Tech shares falling sharply included IBM, which dropped 3 1/4 to 83 1/8. It will report earnings Thursday. Other losers included Cabletron Systems, down 4 1/2 to 68; Sun Microsystems, down 2 1/4 to 37 7/8; Compaq, off 2 to 44; Oracle, down 2 5/8 to 40; Seagate, down 2 to 47 5/8; and Quarterdeck, which plummeted 4 3/8 to 15 5/8.

Even some tech companies that have reported better-than-expected results are being slammed. International Rectifier plunged 3 1/4 to 17 7/8 despite its strong earnings report last Thursday.

* Federal Express dropped 3 1/4 to 69 3/4 after warning Friday that traffic is being penalized by the snowy Eastern weather.

* Retail stocks were broadly lower. Dillard lost 1/2 to 29, Federated Department Stores gave up 3/4 to 27, Nordstrom sank 7/8 to 41 1/8 and Gap was off 3/4 to 45 3/4.

* On the plus side, investors ran back to drug, biotech and household-products companies, many of which are expected to continue to show strong earnings growth.

Merck gained 1 1/2 to 63 5/8, American Home Products jumped 2 3/8 to 97 5/8, Chiron rose 1 to 106 3/4, Helene Curtis gained 2 1/4 to 33 3/8 and Alberto-Culver rose 1 1/4 to 33 3/4.

* Phone utilities, another group considered “safe haven” stocks, advanced. BellAtlantic rose 1/2 to 69 1/4, Ameritech added 1/2 to 57 1/4 and GTE gained 5/8 to 45 3/8.

Overseas, many markets continued to advance despite U.S. shares’ woes. In Frankfurt, the DAX index hit a record high before closing up 2.6 points at 2,359.05. Markets also ended higher in Hong Kong, Singapore, Sao Paulo, Paris and London, among other places.

Market Roundup, D8