Blue-chip and technology stocks lost ground Wednesday as investors were put off by less-than-dazzling earnings reports from some key companies. The Nasdaq composite lost 42 points to close at 3,987.92 while the Dow fell 183 points to end at 10,516.48.
"I think the sell-off is basically being driven by technology disappointments or what is being perceived as tech disappointments,'' said Michelle Clayman of New Amsterdam Partners. "Some of them are actually meeting expectations or beating them slightly. Yet there is fear of future disappointments because everyone is suddenly realizing that the last couple of years of profit growth we have seen cannot last forever.''
LSI Logic (NYSE: LSI) took a beating even though it met analysts' estimates in its latest quarter. The stock fell 7 7/16 to 33 1/16 after analysts downgraded the chipmaker because its second-quarter sales were below some estimates.
LSI's woes had a chilling effect on the rest of the chip sector as Intel (INTC) dropped 1 7/8 to 139 while Advanced Micro Devices (AMD) and Rambus (RMBS) shed 3 5/8 and 9 9/16 a share, respectively.
Microsoft (MSFT) shares fell 1 3/16 to 67 13/16 after it asked the Supreme Court of the United States to allow a lower court to hear its appeal of antitrust violations. The company said today that its appeal raises far too many factual and legal issues for the high court to sort out easily.
Oracle (ORCL) closed up 3/4 to 76 3/4 and Sun Microsystems (SUNW) gained 9/16 to 109 9/16.
Among widely held PC stocks, Dell Computer (DELL) inched up 1/16 to 46 7/8; Compaq (CPQ) added 1 1/8 to 29 3/16; Gateway (GTW) dropped 1 13/16 to 58 9/16 and Apple (AAPL) closed unchanged at 50 1/16.
Amazon.com (AMZN) shares fell 1 9/16 to 36 1/16 ahead of its second-quarter results after a Lehman Brothers analyst downgraded the stock, saying she was "throwing in the towel," on the company.
Yahoo! (YHOO) dipped 2 1/16 to 135 15/16 while America Online (AOL) lost 2 to 53 1/2 and eBay (EBAY) shed 3 9/16 to 52 11/16. Lycos (LCOS) rallied up 6 1/16 to 65 3/4.
Remedy Corp. (Nasdaq: RMDY) plunged 19 23/32 to 23 3/8 after it reported second-quarter results that met earnings expectations but included disappointing revenue numbers.