Yahoo's woes snuff out tech revival
The company's profit warning and management shake-up pull technology stocks lower as the Nasdaq composite sheds 55 points to finish at 2,168.76.
Investors opted to buy more blue-chip issues as the Dow Jones industrial average surged up 129 points to 10,858.25.
"It doesn't surprise me that there is some profit-taking in the Nasdaq after the increases we have seen over the last couple of days," said John Forelli, senior vice president of Independence Investment Associates. "It's hard to figure out what is going to give the markets sustainability going forward. We are sort of in a wait-and-see mode. People are bracing for the worst and hoping we at least find the floor in the meantime."
Shares of Yahoo fell $3.25 to $17.69, but analysts said the Internet portal's stock is still too pricey considering the company's 2001 earnings will be substantially lower and that CEO Tim Koogle is stepping aside.
The CEO of online advertiser DoubleClick said the company wasn't experiencing anything as bad as Yahoo, but its shares still closed off $1.25 to $12.06. eBay fell $3.38 to $39.13, while Amazon.com and CMGI closed off 56 cents and 47 cents a share, respectively.
AOL Time Warner also sought to distance itself from Yahoo with word of expanded advertising deals, rising subscriber rates, and a strengthening financial picture. By day's end the stock shed 80 cents to finish at $44.50.
Yahoo's woes hampered other online content providers. CNET Networks, the publisher of News.com, dropped $1.13 to $9.44 after it issued a profit warning. Terra Lycos trimmed 75 cents to $11.75, and NBC Internet lost 6 cents to $2.31.
National Semiconductor gained 41 cents to $25.25 after it topped analysts' reduced estimates in its third quarter and issued a profit warning for the fourth quarter.
Intel moved up 31 cents to $33.25. Advanced Micro Devices gained 83 cents to $25.93, and IBM lost $1.08 to $106.47.
Among widely held PC stocks, Dell Computer inched up 19 cents to $26.13; Compaq Computer lost 49 cents to $21.30; Gateway shed 46 cents to $17.26; and Apple Computer closed off 44 cents to $20.81.
Metromedia Fiber gained 22 cents to $9.75 after the company reported a narrower-than-expected loss in its fourth quarter. The company also set a cash flow positive target for 2003.
Copper Mountain Networks lopped off 78 cents to $3.69 after its Wednesday announcement of job cuts, hefty restructuring charges and management changes, including the resignations of its chairman and chief financial officer. Analysts stepped in to restate the bad news: Don't expect an improvement anytime soon.
Cisco Systems dropped $1.19 to $22.81. Nortel Networks clipped 74 cents to $18.24, and Lucent Technologies ended up 22 cents to $12.97.
Oracle slid $1.25 to $17.38. Microsoft shaved off $1.50 to $59.19, and Sun Microsystems ended off $1.75 to $20.31.
CNET Networks, publisher of News.com, has a stake in NBCi.
Staff and Reuters contributed to this report.