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Tech Industry

Antsy investors dump tech shares

The Nasdaq composite falls more than 100 points after analysts warn that bellwethers such as Oracle and Intel are in for more rough sledding this quarter.

Technology stocks lost ground Monday after analysts downgraded a handful of leaders, sending the Nasdaq composite down 104 points to 2,059.39.

The Dow Jones industrial average shaved off 48 points to finish at 10,532.16.

"The tech stocks have moved ahead quite significantly, but let's face it, people have been hurt so badly and lost so much money by the decline that there is a natural tendency to take profits," Jack Shaughnessy, chief investment strategist for Advest, told Reuters.

Downgrade reports for Intel and Oracle Monday indicated that while these companies' stocks have skyrocketed over the past two weeks, the recoveries are considered premature because neither company has hit its true bottom.

Merrill Lynch analyst Joseph Osha issued a "reality check" for several companies including Intel, down $2.11 to $30.32; communications chipmakers Applied Micro Circuits, down $4.48 to $25.52; PMC-Sierra, down $6.05 to $38.76; and Vitesse Semiconductor, down $2.33 to $32.44.

Advanced Micro Devices lost $1.40 to $27.60, and IBM closed off $2.83 to $112.

It's still early in Oracle's fourth quarter, but Lehman Brothers sounded alarm bells, partially blaming Sun Microsystems' earnings report last week. Oracle fell $2.60 to $17.15, while Sun dropped $2.14 to $17.57. Microsoft slid 75 cents to finish at $68.25.

Webvan shares soared 166 percent, closing at 16 cents after trading as high as 30 cents at one point. The stock for the struggling online grocer had closed Friday at 6 cents. The company didn't announce any news, although the board of directors was scheduled to meet Monday for the first time since Chief Executive George Shaheen resigned.

Josh Peters, a stock analyst with mutual fund research firm Morningstar, speculated that it might be a so-called short squeeze, in which investors who shorted the stock to profit when it would fall thought it wouldn't go lower than 6 cents and moved to cover themselves. Besides Shaheen's resignation, Webvan also faces a Nasdaq delisting.

"That's the only other reason I can think of (for the rise in shares) besides insanity," Peters said.

Cisco Systems shaved off $1.82 to $17.33. Nortel Networks dropped $1.01 to $15.94, and Lucent Technologies closed off 31 cents to $9.20.

Among widely held PC stocks, Dell Computer shed 77 cents to $29.35. Compaq Computer lost 86 cents to $20.65. Gateway dipped 12 cents to $18.04, and Apple Computer fell 79 cents to $24.25.

Shares of Exodus Communications clipped 10 cents to $9.87 after spending much of the day in the black on takeover rumors.

America Online Time Warner shed $1.09 to $47.60. eBay fell $3.70 to $46.95, and Amazon.com gained 42 cents to 16.20. Yahoo lopped off $1.89 to $17.96, and CMGI finished down 44 cents to $2.53.

Telecommunications company SBC Communications fell 75 cents to $39.25 after it matched already lowered expectations for its first quarter but warned that the rest of 2001 would fall short of estimates.

Staff and Reuters contributed to this report.