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Markets slip after poor earnings reports

Technology stocks get dinged after companies file grim quarterly reports.

Markets slipped as Wall Street weighed in on a slew of earnings reports.

The Dow Jones industrial average shed 33.35 points to 10,576.65, and the Nasdaq composite index was off 17.22 to 2,029.37.

Among the CNET Technology indexes, PC Software, down nearly 5 percent, struggled, but Server Hardware, up 2.5 percent, thrived on the theory that Sun Microsystems' second-quarter report held a few bright spots.

Sun, which topped reduced estimates Thursday, declined to provide an outlook for future quarters and noted the economy was very unpredictable, but analysts were cautiously optimistic. "Overall, the quarter was slightly better than expected," wrote Deutsche Banc Alex Brown analyst George Elling, who maintained a "strong buy" on the stock. Sun shares are up 59 cents to $15.03.

Salomon Smith Barney analyst John Jones also upgraded Sun from "neutral" to "buy," based on the company's stock price and the theory that information technology spending had bottomed. Using the same logic, Jones also upgraded Hewlett-Packard, whose shares fell 9 cents to $26.42.

Worries about Microsoft hurt the PC Software index. On its fourth-quarter conference call, Microsoft executives cut their outlook, citing PC sales. Microsoft shares fell $3.39 to $69.18.

Meanwhile, PC maker Gateway saw its shares struggle after a weaker-than-expected second-quarter report. Gateway lost $3.60, or nearly 25 percent, to $10.99, Compaq Computer fell 1.08 cents to $14.70 and Dell Computer slipped 49 cents to $27.89.

Communications chipmakers also took a hit after PMC-Sierra, down $4.07 to $27.24, Vitesse Semiconductor, down 73 cents to $17.94, and Xilinx, down $2.97 to $37.90, reported earnings.

Tripath Technologies, which makes amplifiers and technology for DSL (digital subscriber line) providers, was the disaster of the day, falling $6.04, or 76 percent, to $1.86, after the company reported a second-quarter loss of 31 cents a share. Revenue fell 66 percent from a year ago to $1.8 million.

Shares of Scientific Atlanta, which makes cable set-top boxes, were also rattled. The company reported fiscal fourth-quarter results that fell short of many projections. Sales of $619.6 million missed estimates. Meanwhile, bookings slipped. The news sent shares falling $12.28, or 35 percent, to $22.80 after a host of brokerage firms cut their ratings on the stock.

"Weaker-than-expected results were largely due to slowing digital set-top-box unit sales in North America," said Jason Ader, an analyst at Thomas Weisel.

Among other notable tech issues, Intel fell 3 cents to $29.93, Cisco Systems gained 23 cents to $17.99, Oracle slipped 10 cents to $19.07 and Network Associates gained $2.01 to $13.30 after beating estimates in its second quarter.

Staff and Reuters contributed to this report.