Blue chips see green on merger buzz
Merger news helps lift some old-economy stocks, while semiconductor downgrades inflict losses on the tech sector.
The Nasdaq composite index fell 129.84, or 3 percent, to 4,013.34, and the Standard & Poor's 500 index dropped 14.83 to 1,492.25.
The Dow Jones industrial average rose 49.99 to close at 11,310.60 led by J.P. Morgan, which rose $7.81 to $167.75.
German magazine Wirtschaftwoche reported that Deutsche Bank, Europe's biggest bank, is in talks to buy J.P. Morgan. Shares in America's fifth-largest bank reached a high of $172 in midday trading, while Deutsche Bank's shares slipped 1.8 percent to 96.25 Euros in evening trading on the Frankfurt exchange.
The Philadelphia semiconductor index dropped 64.07, or nearly 6 percent, to 1,057.68 led by Micron Technology, which fell $9.50, or 12 percent, to $69. Intel slipped $3.55 to $65.70, and Advanced Micro Devices dipped $2.13 to $32.63.
Donaldson, Lufkin & Jenrette analyst Boris Petersik downgraded Micron to "underperform" from "buy." Shares of chipmaker Intel also dropped more than 6 percent yesterday after an influential Wall Street analyst cut his outlook for the company.
Dell Computer fell $1.50 to $39.50, and Cisco Systems slipped $1.75 to $64.25.
The CNET tech index fell 87.88 to 3,215.97. Decliners outpaced advancers, with 79 of the 97 stocks in the index falling, 17 rising and one remaining unchanged.
Nearly all of the 18 sectors tracked by CNET Investor lost ground. Makers of semiconductors, semiconductor capital equipment, and server hardware posted the sharpest drops, falling 5 percent each. Computer peripheral makers posted the biggest gains, rising 0.41 percent.
Some e-commerce stocks managed to keep afloat. Amazon.com rose 19 cents to $45.88; eToys climbed $1.50, or nearly 31 percent, to $6.38; Buy.com gained 72 cents, or nearly 22 percent, to $4; and Outpost.com closed at $4.75, up about 28 percent to $1.03.
Internet portals were not as fortunate. America Online dropped $1.25 to $56.13. Lycos slipped $1.19 to $71.81, and Yahoo fell $5.06 to $112.06.
WorldCom shares fell again today, dropping $2.25 to $31.50, and set a new 52-week low of $31.06 compared to a high $61.33. Volume topped 70 million shares, making it the most actively traded stock on the Nasdaq.
Shares of Ameritrade received a spark after Credit Suisse First Boston and CIBC Worldmarkets raised the online broker to "buy." Ameritrade rose $2.19, or almost 12 percent, to $20.81, and E*trade jumped 31 cents to $18.38.