MIDDAY MARKETS: Economic data slows tech rally

2 min read

Technology stocks struggled to hold their gains for the week as employment data indicated that the U.S. economy continues to falter. The Nasdaq rose 0.92 to 1,899.87.

The Dow Jones industrial average dropped 44.18 to 9,969.29, and the Inter@ctive Week @Net Index fell 3 to 171.61.

The number of U.S. citizens seeking first-time unemployment benefits last week reached its highest level in five years, the U.S. government said.

The economic report was one of many on Thursday that pointed to a worsening downturn. In a report that raised hopes that the Federal Reserve would make more cuts to interest rates, the overall Producer Price Index (PPI)--a gauge of inflation at the wholesale level--fell 0.1 percent in March. Economists polled by Reuters had expected the PPI to remain unchanged.

In addition, retail sales for March fell 0.2 percent.

"I think you can make a case that slowdown is understood by investors and priced in, but a (long) duration isn't necessarily priced in," Bryan Piskorowski, an analyst with Prudential Securities told Reuters. "There's a fear that a recovery may not come in the third quarter."

The markets also absorbed earnings news from Yahoo (Nasdaq: YHOO), down 51 cents to $15.35. After the company reported its first-quarter earnings and gave a murky outlook for 2001, Wall Street was busy pondering whether the worst was over for the portal and its downtrodden shares.

Network Appliance (Nasdaq: NTAP) shares were down $1.63 to $14.93 after its Wednesday night profit warning. Some analysts took the announcement, which followed EMC's warning, as a bad sign for the storage market. EMC (NYSE: EMC) shares were off another $2.33 to $29.88.

Art Technology Group (Nasdaq: ARTG), up 14 cents to $5.34, announced Thursday that it will lay off 12 percent of its staff as part of an effort to trim costs.

Juniper Networks (Nasdaq: JNPR), up $2.66 to $45.36, matched analysts' estimates for its first quarter Thursday, pulling in $85.4 million, or 25 cents per share. The company, however, said an economic slowdown could ding future results.

Amazon (Nasdaq: AMZN) was up 44 cents to $13.76, and AOL Time Warner (NYSE: AOL) rose 45 cents to $41.65.

Cisco Systems (Nasdaq: CSCO) fell 14 cents to $17.26, Intel (Nasdaq: INTC) fell 74 cents to $26.78, Oracle (Nasdaq: ORCL) rose 4 cents to $ 15.57 and Microsoft (Nasdaq: MSFT) was up 16 cents to $60.20.

ZDII staff and Reuters contributed to this roundup.