The tech rally came to an end Thursday as investors took some short-term profits ahead of next week’s highly anticipated Fed meeting. After posting strong gains for most of the week, the Nasdaq composite closed off 105 points to 2,754.29.
Blue-chip stocks enjoyed a decent rally, pushing the Dow Jones industrial average up 83 points to 10,729.52.
During his testimony to a senate panel, Federal Reserve Chairman Alan Greenspan made no direct mention of the Fed's intention toward interest rates, but suggested he'd be receptive to tax cuts.
Greenspan testified that the economy has slowed dramatically, giving a signal that further rate cuts are ahead.
“There's some gamesmanship going on in advance of the Fed meeting,” said Richard Cripps, chief market strategist for Legg Mason. “Some are selling now with the idea that once you have the (rate cut) announcement, you might have some pull back and that that might be a better time to be a buyer.”
Fiber-optic giant Corning (NYSE: GLW) handily topped estimates for its fourth quarter, but investors dumped shares on worries about spending by telecom customers. The stock closed off $13.88 to $56.25.
Network-equipment stocks lost ground Thursday as Cisco Systems (CSCO) fell $3.25 to $39.31 while Lucent Technologies (LU) and Nortel Networks (NT) dropped $1.63 and $2.38 a share, respectively.
Among widely held PC stocks, Dell (DELL) shaved off 69 cents to $26.44; Compaq (CPQ) picked up 48 cents to $22.33; Gateway (GTW) lost $1.61 to $20.60 and Apple Computer (AAPL) shed 63 cents to $19.88.
SanDisk Corp. (Nasdaq: SNDK) fell $15.06 to $31.13 after warning of slumping revenues through the first half of the year due to a slowdown in the economy.
Kana Communications, Inc. (Nasdaq: KANA) closed off $2.69 to $6.75 as analysts downgraded the stock on the heels of its disappointing fourth-quarter results.
Intel (INTC) dropped $1.75 to $34.50. Advanced Micro Devices (AMD) clipped 81 cents to $21.88 and IBM (IBM) moved up 31 cents to $110.75.
SBC Communications Inc. (NYSE: SBC), unchanged at $47.38, reported fourth quarter earnings on target with First Call's estimate of 57 cents a share Thursday. SBC's sales were driven by growth in data services, its first full quarter of long-distance service in Texas, and contributions from Cingular Wireless.
America Online (AOL) inched up 2 cents to $55.77. Yahoo (YHOO) fell $3.69 to $39.19 while eBay (EBAY) and Amazon.com (AMZN) lopped off $4.56 and $2.88 a share, respectively.
Webvan (Nasdaq: WEBV) gained 25 cents to 50 cents after it posted a narrower-than-expected fourth-quarter loss and announced a revised business plan.
Sun Microsystems (SUNW) slid $1.56 to $31.19. Oracle (ORCL) clipped 13 cents to $29.94 and Microsoft (MSFT) closed off $1.13 to $61.81.