Techs start week on low note
Technology stocks back off their five-week rally as a few companies deliver bad financial news that overpowers last week's enthusiasm.
The Nasdaq fell 18.16 to 2,173.37, and the Dow Jones industrial average slipped 16.07 to 10,935.17.
The Nasdaq gave up last week's rally, and the most actively traded stock on the New York Stock Exchange, Cisco Systems, which had been up most of the day, was down 39 cents to close at $19.25. Investors are anticipating the company's third-quarter results, due out Tuesday.
Shares on the Nasdaq had continued their long rally Friday despite a worse-than-expected employment report, as investors held out hopes that the Federal Reserve would cut interest rates again.
However, there was no economic news for investors to mull on Monday, and a few troubled technology companies brought the Nasdaq into the red by market close.
"The market is bland today," Tom Sparico, a stock trader at Bengal Partners told Reuters. "But after the employment report (on Friday)...the market is feeling it will see further Fed easing, probably 50 basis points," he said. "And that suggests longer term that the equity market will be in better shape."
Portal Software, which closed down $3.35 to $5.93 said it will miss first-quarter earnings and revenue estimates by a wide margin. It plans to lay off staff, shut facilities and write off assets in an attempt to cut costs.
Transmeta plunged $3.47 to close at a new 52-week low of $11.10. More than 113 million of the chipmaker's shares flooded the market to be sold after its initial public offering "lockup" period expired.
Networking equipment maker 3Com lost 38 cents to $6.52 after it said it would cut its work force by 3,000 people, or 30 percent, in an effort to trim its costs by $1 billion.
On the merger front, Proxicom, up $1.78 to $7.44, received a rival bid from a little-known South African company just as it was revving up for its merger with Compaq. Shares bounded up $1.66 to $7.32 though analysts said Proxicom may have a tough decision because Compaq isn't likely to enter a bidding war.
In positive news, Motorola said it expects its mobile phone unit to return to profitability in the fourth-quarter. But shares fell 5 cents to $16.40.
Amazon was off 64 cents to $16.92, AOL Time Warner lost 10 cents to $52.10 and Yahoo shed 15 cents to $19.98.
Intel gained 28 cents to $31.16, Microsoft jumped 60 cents to $71.35 and Oracle fell 22 cents to $16.87.
Staff and Reuters contributed to this report.