CNET también está disponible en español.

Ir a español

Don't show this again

Tech Industry

Nasdaq treads water while HP sinks the Dow

Investors search in vain for a pulse in the tech sector as retail stocks and Hewlett-Packard lead the Dow lower.

    Investors searched in vain for a pulse in the tech sector as retail stocks and Hewlett-Packard led the Dow Jones industrial average lower.

    The Nasdaq composite index inched up 1.97 to 3,851.66, and the Standard & Poor's 500 index dropped 7.13 to 1,484.43.

    The Dow dropped 109.14 to close at 11,067 led by Home Depot, which lost $5.50, or 9 percent, to close at $53.50. Dow component HP shed $3.50 to $111.

    At the end of regular trading, Intel closed up 94 cents at $67.88, while Microsoft fell 56 cents to $71.63.

    At least one analyst said the malaise hanging over tech stocks could linger a while longer.

    "In some areas of the tech sector, growth is slowing, and that doesn't seem to be reflected in some of the valuations," said Ed Keon, a market strategist at Prudential Securities.

    "The high valuation part of the tech sector is going to have a hard time outperforming (the market) over the next several months, with some exceptions," added Keon, singling out PC makers and communication-equipment companies.

    Brian Belski, a market strategist at US Bancorp Piper Jaffray, went further, saying more companies will fall by the wayside.

    "Some stocks aren't going to make it," he said. "Some of these companies became public when there was a lot of euphoria and momentum in the marketplace, when they didn't warrant being public."

    Yet Belski believes a further shakeout will help the worthy companies.

    "You're going to have a full-circle type of environment," he said. "People will suppress the value of tech stocks, then come back to them," he said.

    The CNET tech index rose 12.97 to close at 3,161.75. Winners edged out losers, with 60 of the 97 stocks in the index rising and 37 falling.

    Of the 18 sectors tracked by CNET Investor, Internet e-tailers and semiconductor-equipment companies gained the most, climbing 3 percent each. Computer data storage-makers were the day's biggest losers, falling nearly 2 percent.

    Among members of the CNET tech index, shares of chip manufacturer Conexant Systems boasted strong gains, rising $5.13, or about 18 percent, to $33.69.

    Other chip companies extended yesterday's robust gains. The Philadelphia semiconductor index, which gained about 8 percent yesterday, rose another 33.33, or 3 percent, to 1,060.52 today.

    Among the winners: National Semiconductor gained $2 to $40; Atmel rose $3.31, or 11 percent, to $32.63; and Cypress Semiconductor climbed $2.88 to $43.56.

    Server-hardware maker Cobalt Networks rose $6.50, or nearly 16 percent, to $47.50.

    DigitalThink jumped $6.31, or 18 percent, to $40.94. The provider of online learning products was raised to "trading buy" from "market perform" by Goldman Sachs.

    The news was not so good for some Internet service providers, many of which set new 52-week intraday lows.

    EarthLink Network fell 19 cents to $9.81, compared with a 52-week high of $65. NetZero also reached a new low, falling 38 cents to $4.56, down from a high of $40. Juno Online Services fell 38 cents to $4.94; the stock has traded as high as $87 in the past year.

    Network Appliance shares fell $5.81 to $84.94 after the release of first-quarter earnings. The company, which makes computers that store and deliver files on computer networks, said fiscal first-quarter profit fell 63 percent because of acquisition-related costs.

    Net income for the quarter ended July 28 fell to $5 million, or 1 cent a share, from $13.5 million, or a split-adjusted 4 cents, a year earlier. Sales more than doubled to $231.2 million from $103.3 million.

    Excluding expenses of $27.3 million from the acquisition of Orca Systems, the company had profit of $32.3 million, or 9 cents. Wall Street expected a profit of 8 cents a share, the average estimate of analysts polled by First Call/Thomson Financial.