The unfortunate confluence of a natural disaster, a rising U.S. trade deficit and the falling dollar conspired to punish Wall Street Tuesday as the Dow Jones industrial average plunged 225 points to 10,598.42 while the Nasdaq shed 65 points to end at 2,821.17.
"It's the weakening in the dollar, the disaster in Taiwan, it's Apple Computer, it's a record trade deficit. It's a lot of things," said Peter Coolidge, senior equity trader at Brean Murray & Co. "It's just uncertainty and not knowing the situation that has the market jittery."
Things got off to a bad start late Monday when a 7.6 earthquake rumbled through Taiwan. That was followed by the Bank of Japan's decision not to halt the yen's surge against the dollar. Then Apple Computer Inc. (AAPL) issued a profit warning.
Finally, the July trade gap came in larger than predicted, indicating that the difference between the value of goods and services the U.S. imports from and exports to other countries, surged to $25.2 billion in July.
The earthquake in Taiwan was especially disconcerting to semiconductor investors. Leading DRAM makers lost ground on concerns the earthquake might push world chip prices higher, at least in the short term.
Altera Corp. (ALTR) fell 2 _ to 50 1/8 while Xilinx Inc. (XLNX) and Broadcom Corp. (BRCM) shed 1 11/16 and 5 3/16 a share, respectively. Micron Technology Inc. (MU) lost 1 3/4 to close 78 1/4. Intel Corp. (INTC) fell 2 1/16 to 82 and Advanced Micro Devices Inc. (AMD) slid 7/8 to 18 7/16.
Apple Computer Inc. (AAPL) tumbled 9 3/16 to 69 1/4 after the company said it would fall well short of Wall Street estimates. Apple blamed a shortage of G4 chips that power its new line of Power Mac computers.
Shares of Motorola Inc. (MOT), which makes the G4 chip took part of the fall for Apple, fell 3 to 87 11/16.
Dell Computer Corp. (DELL) dropped 2 3/8 to 46 1/2 and Compaq Computer Corp. (CPQ) slid 9/16 to 23 5/16. Gateway Inc. (GTW) closed off 3 3/16 to 50 11/16.
Corel Corp. (CORL) gained 1 9/16 to 8 1/2 after claiming its latest earnings report confirms its comeback.
Western Digital Corp. (WDC) fell 3/8 to 4 1/4 after it issued another profit warning Tuesday. The downtrodden disk-drive manufacturer said it expects to lose as much as $1.30 a share, well below First Call's expected loss of $1.06 a share.
Internet stocks faired better than their hardware brethren Tuesday as Yahoo! Inc. (YHOO) gained 1 3/8 to 169 3/4 and America Online Inc. (AOL) rose 1 9/16 to 84 3/8. Lycos Inc. (LCOS) charged up 2 3/8 to 46 1/8 and Infoseek Corp. (SEEK) tacked on 5/16 to end at 28 1/16. Amazon.com Inc. (AMZN) lost 1/2 to 62 1/4.
Microsoft Corp. (MSFT) shares fell 2 15/16 to 94 5/8 as the Justice Department wrapped up its antitrust case against the software maker. Oracle Corp. (ORCL) trimmed 5/8 to 44 1/2 and Sun Microsystems Inc. (SUNW) closed off 2 to 92 9/16.