Wall Street braces for more disappointments
Investors digest downbeat news from hardware, software and Internet companies, and prepare themselves for quarterly reports after the bell.
The Nasdaq composite index gained 9.25 points to 1,972.04, and the Dow Jones industrial average gained 65.38 points to 10,241.02. Comverse Technology sank almost 34 percent, falling $13.07 to $25.95, after the company announced it would miss estimates for the second, third and fourth quarters. A general slowdown in spending by telecommunications carriers has hurt the telecommunications software company. Competitor Openwave Systems slid $3.90 to $20.24 in sympathy. Morgan Stanley downgraded both stocks.
Internet media companies got slammed a day after DoubleClick warned that things weren't looking any better in the Internet advertising market. DoubleClick topped expectations for its second quarter, posting a net loss of $37.9 million, or 29 cents per share. Excluding special charges, the online advertising company lost $9.5 million, or 7 cents per share. But executives said Tuesday that they don't see the ad market recovering until at least the middle of 2002.
DoubleClick lost $1.93 to $10.09. Yahoo, which will report its quarterly results after the bell, was down 80 cents to $17.03. AOL slipped $1.68 to $48.50. The CNET Internet Content index, which contains a host of companies that depend on online advertising, was down more than 3 percent.
Motorola, which also reports after the market close, was up 17 cents to $15.67. Merrill Lynch analyst Henry Blodget trimmed his estimates for Microsoft, saying that slowing PC demand could hurt the software giant. Blodget's fellow analyst at Merrill Lynch, Steve Fortuna, on Wednesday cut his global PC unit growth estimate from a 2 percent decline to a 7 percent decline. Microsoft was up $2.02 to $66.50.
Fortuna's note followed an announcement from Compaq Computer on Tuesday night that it expects to post second-quarter operating earnings in line with Wall Street estimates. However, it also said sales will come in below forecasts, and it announced further job cuts. Compaq was up 69 cents to $14.45. The CNET PC Hardware index showed slight gains.
Beleaguered services company Exodus Communications lost 8 cents to $1.32 after it was downgraded from "market outperform" to "market perform" by Goldman Sachs.
Among leading volume movers, Oracle gained 41 cents to $18, Cisco Systems rose 50 cents to $16.70, and Intel gained 27 cents to $28.06.
WorldCom was off 9 cents to $14.15, Sun Microsystems fell 10 cents to $13.97, and EMC fell $1.07 to $20.30.
Staff and Reuters contributed to this report.