Anxious investors stall Street

Tech stocks take a hit despite positive earnings reports from Intel and @Home, stalling a three-day climb.

2 min read
Stocks closed sharply lower today on growing concern about the quality of third-quarter corporate earnings, with technology stocks taking a hit as investors waited nervously for more companies to report their quarterly results.

The Dow Jones Industrial Average's slide accelerated in late afternoon trade as investors were disappointed by Eastman Kodak's earnings report. The photography equipment maker posted a 72 percent increase in third-quarter profits, but the Street had expected the company to beat estimates by an even larger margin.

The downward movement stalled a three-day climb on Wall Street.

The Dow fell 63.33 points or .79 percent to 7,938.14. The blue chip index dipped as much as 116.88 points earlier today. The technology-heavy Nasdaq Composite Index fell by a greater percentage, dropping 36.64 points or 2.37 percent to 1,509.44. The Nasdaq lost as much as 41.38 points earlier in the day.

Shares of PeopleSoft were hammered today, falling by as much as 20 percent after the second-largest maker of business-management software canceled its appearance at an investment conference. Today's decline comes on the heels of another major plunge earlier this month, when the company fell 25 percent after two influential investment banks downgraded the its financial outlook.

PeopleSoft closed down 18.38 percent or 4.25 points at 18.88. The stock has traded as high as 57.44 and as low as 19.75 during the past 52 weeks. It was today's third most-active stock in U.S. markets.

S&P Equity Group analyst Brian Goodstadt said that, typically, cancelled presentations at investor conferences are not a good sign. Nevertheless, he maintained his "buy" rating on PeopleSoft's stock.

Analysts expect PeopleSoft to earn 17 cents a share, according to First Call. The battered company will release third-quarter earnings on October 20.

Despite several technology companies reporting better-than-expected earnings results recently, the tech sector as a whole mostly was in the dumps today, as investors locked-in on gains and did some profit-taking.

Cypress Semiconductor today reported earnings that beat Wall Street expectations by 1 cent.

Shortly after the market closed, chip bellwether Intel beat Wall Street estimates by posting earnings of 89 cents per share. The consensus of analysts polled by First Call had expected the company to earn 80 cents per share.

Intel stock had fallen 2.19 percent or 1.88 points to 83.56 ahead of the news.

Also after the market closed, high-speed cable Net access provider @Home reported that it had met Wall Street expectations by posting a net loss for the third quarter of approximately $9.7 million, or 8 cents per share (See related story). The stock had dipped 3.21 percent to 41.5 ahead of the news.

Online giant America Online fell 1.27 percent to 92.19 today.

Web portals Yahoo, Excite, Lycos, and Infoseek were down across the board. Yahoo fell 3.93 percent to 109.94 while Excite dipped 5.22 percent to 32.94. Lycos and Infoseek fell 5.98 percent to 27.5 and 6.51 percent to 19.75, respectively.

Bloomberg contributed to this report.