Techs slip amid gloomy economic data
Tech stocks end the week on a mixed note after the government says the U.S. economy fell far faster than expected in the third quarter.
The Dow Jones industrial average was up 22.14 to 9,851.56, and the Nasdaq composite index fell 2.70 to 1,930.56.
The U.S. economy shrank faster than expected during the third quarter, according to a new report from the Commerce Department. The gross domestic product, a measure of total economic activity, decreased at a revised 1.1 percent rate--nearly triple the 0.4 percent rate reported a month ago and worse than the 0.9 percent rate of contraction Wall Street economists had predicted.
Some analysts argued the poor GDP figure raised the odds that the Federal Reserve would cut interest rates for the eleventh time this year when it meets on Dec. 11.
Novellus Systems fell $3.53 to $38.07, a day after the company warned that fourth-quarter orders will likely fall short of forecasts and that it could report first- and second-quarter losses next year. The chip equipment maker said in October that it expected fourth-quarter orders of $125 million to $150 million. It's dropped that number to between $105 million and $124 million, due to the downturn in the semiconductor industry.
Shares of Novell were up 27 cents to $4.26. The networking software maker reported a sharply wider fourth-quarter loss, due in part to a $114 million restructuring charge. It posted a net loss of $94.51 million, or 26 cents per share, compared with a $34.96 million loss a year ago. Excluding charges, the company recorded a profit of 2 cents per share on revenue of $307.6 million.
Companies including Cox Communications, Comcast, Microsoft and AOL Time Warner are expected to make offers to take over AT&T's broadband cable TV unit, sources close to the situation said. The bids could range from $3 billion to $5 billion, but the situation reportedly "remains fluid," particularly after AT&T extended the deadline for offers until Monday. Shares of AT&T were down 13 cents to $17.49.
That same group of cable companies will be watching a San Francisco courtroom anxiously as a bankruptcy judge hears arguments over whether Excite@Home should be allowed to cut off high-speed Internet service to its cable partners.
Some of Excite@Home's bondholders have requested that the cable Internet service provider shut down its service unless its partners are willing to pony up enough money to keep it afloat or pay off the company's debt. Sources say creditors are playing a "game of chicken" to get AT&T to raise its $307 million bid for Excite@Home's assets. In numerous talks, however, AT&T has not budged from its first offer, sources close to the talks said.
Among other heavily traded tech issues, Cisco Systems was up 55 cents to $20.44; Sun Microsystems rose 43 cents to $14.24; Oracle dropped 16 cents to $14.03; and Intel gained 34 cents to $32.66.
Amazon.com was up 17 cents to $11.32, and AOL slid 48 cents to $34.90.
Staff and Reuters contributed to this report.