Techs sink as Dow holds its ground
Favorable earnings news from some marquee tech companies fail to spark enthusiasm among investors as the Nasdaq sinks and the Dow remains flat.
The Nasdaq composite index fell 93.51 to 3,759.99, and the Standard & Poor's 500 index dropped 12.62 to 1,460.25.
The Dow Jones industrial average inched up 2.93 to close at 10,908.76.
Although Cisco Systems and Applied Materials reported strong earnings during the past few days, investors remained anxious about pouring money into an uncertain market. At the end of regular trading today, shares of semiconductor equipment maker Applied fell $2.88 to $3.99, while network equipment maker Cisco slid $4.44 to $63.38.
Intel closed down $1.56 at $62, and Microsoft dropped $1.63 to $72.63.
"The action today was set up yesterday," said Todd Clark, head of listed trading at WR Hambrecht. "Despite the fact that Cisco released strong earnings, the stock was unable to close above $70?and that threw water on the markets."
Investors also chose to wait on the sidelines pending tomorrow's economic reports, which will give the Federal Reserve crucial information on inflation.
"Producer price index and retail sales information comes out tomorrow, which was probably why volume was on the low side," said Clark.
The CNET tech index lost 51.39 to close at 3,070.96. Losers edged out winners, with 65 of the 97 stocks in the index falling, 27 rising and five remaining unchanged.
Of the 18 sectors tracked by CNET Investor, computer network equipment makers and server software developers posted the sharpest drops, falling about 3 percent each. Communication service providers were the day's largest gainers, climbing 1 percent.
The initial public offering of Evolve Software was the biggest percentage gainer on the Nasdaq. The shares jumped $9, or 100 percent, to $18.
ICG Communications was the Nasdaq's largest loser, falling $7.69, or 54 percent, to $6.56 on a volume of 25.5 million shares, more than 36 times the stock's average daily volume. The seller of telephone and Internet services to businesses lowered its earnings forecast for this year and next.
Among members of the CNET tech index, Veritas Software and Seagate Technology posted losses.
Veritas fell $10.50, or about 10 percent, to $97, while Seagate slipped $4.31 to $49.25. VoiceStream Wireless avoided the downturn, gained $6.13 to $130.75.
Chip stocks continued to slide today. The Philadelphia semiconductor index fell 21.12 to 942.65, led by chip equipment maker KLA-Tencor, which lost $3.88 to close at $42.38. Advanced Micro Devices fell $5 to $56.75, and Micron Technology dipped $5.25 to $76.50.