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Tech Industry

MARKET CLOSE: Late rally pares tech losses

    A late rally salvaged what could have been a demoralizing day of trading Monday as the Nasdaq composite closed off 26 points to 3,364.20 while the Dow Jones industrial average ended off 84 points to 10,542.55.

    At midday, it appeared both major indices were headed for triple-digit losses. At one point the Nasdaq was off more than 200 points.

    Analysts said Wall Street is fearful that more increases in borrowing costs on top of the Federal Reserve's 50-basis-point boost announced last Tuesday could decelerate spending on computers, software and other products tech companies provide.

    "Valuation is in the eye of the beholder," said Mike Feeney, an editor at independent research firm Wall Street Strategies. "Up until March, a lot of the best and the brightest of the technology stocks were awarded extremely high price to earnings ratios. Now the pendulum has swung the other way. The market no longer finds that acceptable."

    Microsoft Corp. (MSFT) closed off 7/8 to 64 3/16. Oracle Corp. (ORCL) lost 2 1/4 to 67 13/16 and Sun Microsystems Inc. (SUNW) closed up 2 5/8 to 79 7/8.

    Intel (Nasdaq: INTC) moved up 1/2 to 118 3/8 after it announced a new, higher-margin chip and said sales were booming in Asia. However, Intel also talked down estimates on Friday.

    Competitor Advanced Micro Devices (NYSE: AMD) fell 3 7/16 to 80 3/8 after it said it would sell 90 percent of its communications products unit to technology buyout firm Francisco Partners.

    WebMethods (Nasdaq: WEBM) plunged 15 to 72 after announcing it will buy Active Software (Nasdaq: ASWX), down 15/16 to 32 1/16, a provider of enterprise infrastructure software, in an all-stock deal worth about $1.3 billion.

    Among leading PC stocks, Apple Computer Inc. (AAPL) shaved off 4 1/16 to 89 15/16; Dell Computer Corp. (DELL) dropped 1 to 45 15/16; Gateway Inc. (GTW) fell 1 7/8 to 47 3/8 and Compaq Computer Corp. (CPQ) closed down 1/2 to 26 15/16.

    Yahoo! Inc. (YHOO) moved up 5 15/16 to 126 1/4. Lycos Inc. (LCOS) shed 4 3/8 to 53 3/4 while America Online Inc. (AOL) and Amazon.com Inc. (AMZN) closed off 1 1/4 and 3/4 a share, respectively.

    Performance Technologies (Nasdaq: PTIX) was cut in half, falling 16 13/16 to 11 7/16 after it announced revenue for the second-quarter would be below estimates due to lower-than-expected orders and a delayed shipment.>