Tech Stocks Whipped, Dragging Nasdaq Down
Investors hammered major technology stocks Monday on earnings jitters, while financial, energy and utility stocks helped the New York Stock Exchange close mostly higher.
In currency trading, the euro slumped to a new record low as traders bet European authorities won’t act to bolster the currency.
On Wall Street, the Nasdaq composite suffered another sharp decline, losing 82.06 points, or 2.1%, to 3,896.35, its lowest since Aug. 16.
Big-name tech issues slumped after brokerage Goldman Sachs trimmed revenue and earnings forecasts for IBM, citing the weak euro, which devalues U.S. companies’ European results when translated back to dollars.
Goldman analyst Laura Conigliaro cut her 2000 profit estimate for IBM to $4.45 a share from $4.50. IBM slid $5 to $124.50.
“There’s a certain sense of malaise that is going to continue until we get a better sense of what third-quarter earnings are,” said Charles Pradilla, strategist at SG Cowen Securities.
But the blue-chip Dow industrials lost just 25.16 points, or 0.2%, to 11,195.49, despite IBM’s slide and a sharp decline in Hewlett-Packard, which fell $7 to $114.
The Dow was bolstered by gains in energy, financial and retail shares, among others.
Energy stocks soared as near-term crude oil futures surged, up $1.51 to $35.14 in New York, on expectations that OPEC’s decision Sunday to boost output won’t help the supply situation much.
Overall, winners topped losers by 15 to 13 on the NYSE, while on Nasdaq losers had a 24-to-15 edge. Trading was subdued.
In the bond market, yields edged up, with the five-year Treasury note ending at 5.98%, up from 5.94% Friday.
The euro, meantime, plunged to a new low of 85.8 U.S. cents in New York, down from 86.5 cents on Friday. Finance ministers of the 11 euro-zone nations meeting Friday said “a strong euro is in the interest of the euro area,” but they did not outline any plans to revive the depressed currency.
Among Monday’s highlights:
* Tech stocks falling with IBM included Sun Microsystems, down $5.50 to $115.25; Cisco Systems, down $2.69 to $61.19; Oracle, down $3.13 to $83.44; and Micron Technology, down $4.13 to $64.88.
Among telecom names, JDS Uniphase fell $4.56 to $109.75 and Lucent Technologies slid to $1.25 to $38.88.
* The biotech sector also took a hit. Amgen lost $2.69 to $72.25 and Chiron fell $4 to $46.63.
* Energy stocks rising with crude oil prices included Unocal, up $1.38 to $36.25; Baker Hughes, up $1.88 to $38.75; and Apache, up $2.06 to $66.
* In the financial sector, brokerage stocks were broadly higher in the wake of Goldman Sachs’ deal to buy trading firm Spear, Leeds & Kellogg. Many bank and mutual fund stocks also rose, including J.P. Morgan, up $5.31 to $169.31, and Franklin Resources, up $2.53 to $42.41.
* Oakley surged $2.94 to $20.25 in after-hours trading. The sunglasses maker said it will top analysts’ earnings estimates this quarter amid strong demand.
Market Roundup: C14, C15
