MARKET CLOSE: Technology stocks plummet

2 min read

Technology stocks were hammered again Thursday after leading chip and chip-equipment stocks were dumped in the wake of Applied Materials' lackluster earnings report. The Nasdaq composite shed 133 points to 3,032.47 while the Dow Jones industrial average shed 51 points to 10,656.79.

Despite topping analyst estimates for its fourth quarter, Applied Materials (Nasdaq: AMAT) got mixed reviews from Wall Street analysts. It also lowered estimates for its first quarter.

Applied shares closed off $1.13 to $41.63.

"We will see more of that, companies lowering expectations," said Ned Riley, chief investment strategist at State Street Global Advisors. "They say they might as well take the medicine now since the pressure is in the market."

Communication chipmakers were roughed up Thursday after Merrill Lynch analyst Joseph Osha downgraded the stocks from near-term "buy" ratings to near-term "accumulate."

PMC-Sierra (PMCS) shed $18.13 to $113. Applied Micro Circuits (AMCC) dropped $10.06 to $60.94 while Broadcom (BRCM) and Vitesse (VTSS) closed off $25.19 and $4.94 a share, respectively.

Intel (INTC) fell $1.44 to $40.06. Advanced Micro Devices (AMD) clipped $1.38 to $20.56 and IBM (IBM) closed off $1.13 to $98.25.

Xilinx, Inc. (Nasdaq: XLNX) lost $3.88 to $66 after announcing it would consolidate its outstanding equity through a repurchase of up to $250 million of its common stock.

Among widely held PC stocks, Dell (DELL) trimmed 25 cents to $24.94; Compaq (CPQ) lost $1.41 to $25.50; Gateway (GTW) slid $2.52 to $39.13 and Apple Computer (AAPL) closed off 88 cents to $19.

Yahoo! (YHOO) shed $4.19 to $52.94. America Online (AOL) lost 59 cents to $48.85 while eBay (EBAY) and Amazon.com (AMZN) closed off $1.69 and $2.94 a share, respectively. CMGI (CMGI) closed off $1.56 to $13.13.

Xpedior Inc. (Nasdaq: XPDR) moved up 34 cents to $1.44 after announcing it has expanded its software alliance relationship with IBM and will develop products for IBM's Websphere platform.

Microsoft (MSFT) lost $1.13 to $68.94. Oracle (ORCL) dropped $1.50 to $27.38 and Sun Microsystems (SUNW) closed off $6.69 to $87.25.