MARKET CLOSE: Techs fall after rate cut

Jan. 2, 2002 4:43 p.m. PT

2 min read

Tech stocks retreated Wednesday after the Federal Reserve cut interest rates.

The tech-heavy Nasdaq Composite Index retreated 65.62 to 2,772.73. The Dow Jones Industrial Average gained 6.16 to 10,887.36. The S&P 500 dipped 7.72 to 1,366.01.

As many expected, the Federal Open Markets committee cut short-term interest by half a percentage point on Wednesday. Some observers were hoping for bigger reduction.

AOL Time Warner (NYSE: AOL) fell $1.75 to $52.56. The company posted earnings that topped Wall Street's expectations.

Analysts panned Amazon.com (Nasdaq: AMZN), down $1.63 to $17.31, after the online retailer's fourth quarter earnings report showed slowing sales.

Game software maker Electronic Arts (Nasdaq: ERTS) advanced $5.81 to $45.81 on optimism about the company's prospects later in the year as the number of people with Sony's PlayStation 2 console rises in Europe and North America.

Adobe (Nasdaq: ADBE) dropped $9.06 to $43.69 percent after the company cut its revenue outlook. Analysts lowered estimates, but were split on the company's long-term strength.

PeopleSoft (Nasdaq: PSFT) retreated $7.94 to $41, despite praise from some analysts following the company's report of better-than-expected fourth quarter.

Lucent spin-off Avaya (NYSE: AV) picked up 51 cents to $17.50 met analyst expectations for its first quarter and said it would more than double its earnings in 2001.

Genuity Inc (Nasdaq: GENU), off 16 cents to $3.97, posted a fourth-quarter loss due to investments in its network infrastructure investments and slow order growth from Internet service providers and telecommunications companies.

Openwave Systems (Nasdaq: OPWV) and Cisco Systems (Nasdaq: CSCO) said they will build a system that would allow consumers to check email, voicemail and fax via a single voice call. Openwave fell $2.75 to $69.25. Cisco slid 56 cents to $37.44.

Advanced Fibre Communications (Nasdaq: AFCI) gained $4.25 to $24.81, despite lowering some expectations for 2001. Analysts cut their earnings estimates and praised the company's fourth quarter report.