Many technology stocks held up much better than major blue chips Wednesday, but Nextel Communications was a glaring exception.
Nextel shares tumbled 28% after the wireless communications firm warned that its first-quarter results would be hurt by the slowing economy and higher costs.
"Our domestic operations have begun to feel the impact of a slowing economy and related cost-control measures being implemented by many businesses," Nextel Chief Executive Tim Donahue said.
Nextel's stock (ticker symbol: NXTL) fell $5.81 to $14.63 on Nasdaq, a two-year low.
The news clipped shares of other wireless providers. AT&T; Wireless (AWE) lost $1.80 to $18.25 and Sprint PCS (PCS) slid $1.37 to $18.90.
Nextel, which primarily serves businesses rather than consumers, said corporate downsizing is the No. 1 reason it is losing customers as companies take away cell phones of those laid off.
Donahue cut his forecast for the number of net subscribers Nextel will add during its first quarter to about 500,000, from 530,000 to 540,000. What's more, the firm said its first-quarter operating cash flow will be 15% below the fourth-quarter level because of higher expenses.
Donahue said the company will slash expenses and will raise wireless phone handset prices.