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Tech Industry

Midday Markets: Techs, blue chips slip

Techs were dragged down with the blue chips at midday on Friday. The Nasdaq dropped 28 to 2,553 and the @Net slipped 4 to 322. The Dow Jones industrial average sank 152 to 10,954 after an economic report indicated that inflation may be looming around the corner.

Stocks across the board fell after the Consumer Price Index for April and its core rate rose beyond expectations. The CPI is a key indicator on inflation since it tracks the price that the average consumer pays for goods. The CPI rose to 0.7 percent last month, above the 0.4 percent expected by Wall Street. This was expected, since oil prices have climbed in the last few months. The key was the core rate, that excludes food and energy prices. The core rose 0.2 percent, double the 0.1 percent expected.

If consumers are paying more, then they may have to ask for a raise, which add to a company's costs and cut into earnings. Consumers, whose spending accounts for two-thirds of the economy, could also trim spending since their money doesn't go as far. Also, the Federal Reserve, which meets Tuesday, may look at the numbers and decide to raise interest rates. A rise in interest rates raises the cost to borrow funds for expansion, which can put a damper on growth. A rate hike also makes stocks less attractive next to bonds.

ACTV Inc. (Nasdaq: IATV) rose 1 1/16 to 17 after BusinessWeek's "Inside the Street" column said that the digital TV and TV programming software company may attract more attention because of its interactive TV and e-commerce technology.

At Home Corp. (Nasdaq: ATHM) gained 2 5/8 to 151 15/16 after Microsoft Corp. (Nasdaq: MSFT) signed on to use its At Home Solutions for its 15-million member Internet service.

Go2Net Inc. (Nasdaq: GNET) rose 2 7/16 to 127 1/2 after buying IQC for $20 million.

Iridium World Communications Inc. (Nasdaq: IRID) slipped 3 11/16 to 10 13/16 after warning that it will break its covenants on $800 million in debt.

Software developer Pegasystems Inc. (Nasdaq: PEGA) advanced 1 25/32 to 6 13/16 after announcing that America Online Inc. (NYSE: AOL) will use its software for the automating inbound customer care requests and billing issues. AOL dropped 5 5/8 to 127, Amazon.com Inc. (Nasdaq: AMZN) lost 3 7/16 to 132 9/16 and Yahoo! Inc. (Nasdaq: YHOO) slipped 1 7/8 to 158 1/2.

Priceline.com Inc. (Nasdaq: PCLN) climbed 8 7/16 to 129 15/16 after Merrill Lynch raised its second quarter estimate and 2000 revenue expectations. Merrill now looks for $65 million in sales for the second quarter, up $5 million and $300 million for the year, from an earlier estimate at $265 million. For 2000, the brokerage forecasts sales of $450 million, up from $415 million.

Primus Telecommunications Group Inc. (Nasdaq: PRTL) rose 1 1/2 to 17 1/8 after Morgan Stanley boosted its rating to "strong buy" from "outperform."

PC makers slipped. Dell Computer Corp. (Nasdaq: DELL) added 1 3/16 to 42 1/16, International Business Machines Corp. (NYSE: IBM) dropped 5 11/16 to 240 5/16 and Gateway Inc. (NYSE: GTW) slipped 1 13/16 to 65 13/16.

Hardware stocks also lost ground. Cisco Systems Inc. (Nasdaq: CSCO) fell 1 13/16 to 115 7/8 and Lucent Technologies Inc. (NYSE: LU) dipped 2 1/4 to 58 3/4. Sun Microsystems Inc. (Nasdaq: SUNW) dropped 1 5/16 to 63 7/8.

Intel Corp. (Nasdaq: INTC) lost 1 3/8 to 58 11/16 and Advanced Micro Devices Inc. (NYSE: AMD) added 3/8 to 18 11/16.

Among software makers, Microsoft Corp. (Nasdaq: MSFT) declined 15/16 to 78 3/16, Computer Associates International Inc. (NYSE: CA) dropped 3/4 to 44 1/2 and Oracle Corp. (Nasdaq: ORCL) gained 1 3/16 to 24 3/16.