MIDDAY MARKETS: Nortel inspires nose-dive

Jan. 2, 2002 4:43 p.m. PT

2 min read

Nortel's warning was wreaking havoc on technology stocks at midday Friday. The Nasdaq slid 105.48 points to 2,447.43, and the Dow Jones industrial average was down 53 points to 10,838.02.

The Inter@ctive Week @Net Index fell 13 points to 261.98.

Nortel Networks (NYSE: NT) plunged $9.75 to $20 Friday as analysts came down hard on the Canadian communications equipment company; most lowered their ratings and second-guessed even the company's drastically lowered expectations.

The effect of Nortel's pre-announcement spilled across the tech sector Friday, sending networking and fiber-optic stocks tumbling. JDS Uniphase (Nasdaq: JDSU) was downgraded at First Union and shed $7.75, or 17 percent, to $37.37. Ciena (Nasdaq: CIEN), which recently raised estimates for 2001, lost $4.68 to $84.31.

Corning (NYSE: GLW), off $8.06 to $33.95, confirmed expectations for the first quarter, but ratcheted down growth targets for the full year and said it may announce layoffs in response to news from Nortel, one of its biggest customers.

Juniper (Nasdaq: JNPR) dropped $8.68 to $83.5, and Sycamore Networks (Nasdaq: SCMR) fell $2.25 to $24.56. Lucent (NYSE: LU) shed 94 cents to $12.68, and Cisco (Nasdaq: CSCO) fell $2.13 to $ 28.69.

All other major techs were taking a tumble. Intel (Nasdaq: INTC) was off $1. 06 to $34.75, Oracle (Nasdaq: ORCL) fell $1.68 to $23.81 and Microsoft (Nasdaq: MSFT) dropped $1.81 to $57.

Nextel Communications (Nasdaq: NXTL), down $3.06 to $26.50, posted a narrower-than-expected fourth-quarter loss, but said first-quarter results may be impacted by higher operating expenses in the first part of the year.

The Nasdaq halted trading in the stock of broadband services provider Covad Communications (Nasdaq: COVD), for "additional information requested" from the company after it said it would delay its next earnings announcement due to accounting problems.

Amazon (Nasdaq: AMZN) fell 75 cents to $13.75, AOL (NYSE: AOL) lost $0.84 to $49.11 and Yahoo (Nasdaq: YHOO) shed $2.5 to $28.81.