Technology stocks went into a deep funk Thursday afternoon following Fed Chairman Alan Greenspan's semi-annual Humphrey-Hawkins testimony. The Nasdaq plunged 77 points to 2,684.44 while the Dow shed 34 points to close at 10,969.22.
Greenspan told Congress the Fed would act "promptly and forcefully" if it saw evidence of rising inflation. He also cautioned that the central bank was not committed to any imminent increases in U.S. interest rates and noted prices had so far been well-behaved.
He also warned that there was the risk of a "euphoric" run-up in stock prices that could propel the market to unsupportable levels.
"When Alan speaks the market listens. Unfortunately the market did not like what he had to say," said Bryan Piskorowski, market analyst at Prudential Securities. "It's fairly hawkish. We were expecting more of a feel good type-testimony."
Internet stocks absorbed the brunt of Thursday tech selloff.
Amazon.com Inc. (AMZN) closed off 18 7/16 to 107 despite meeting analysts' estimates in its latest quarter. America Online Inc. (AOL), which actually beat Street estimates by 2 cents a share in its fourth quarter, fell 4 11/16 to 110 3/8. Yahoo! Inc. (YHOO) plunged 6 3/4 to 145 1/8 and Lycos Inc. (LCOS) shed 9 1/16 to finish at 91 7/8.
Excite@Home Corp. (ATHM) lost 1 3/4 to 45 1/4 and Infoseek Corp. (SEEK) trimmed 1/8 to 40 7/8.
In its first quarterly earnings report as a public company, Barnesandnoble.com (BNBN) narrowed its second quarter loss and topped estimates as sales came in at $39.1 million. Its shares closed off 5/16 to 18 11/16.
Network Solutions, Inc. (NSOL) tumbled 5 3/8 to 71 7/8 after reporting earnings that squeaked past First Call's estimate by a penny.
Shares of Compuware Corp. (CPWR) plunged 6 7/8 to 26 3/4 afterbeating estimates for its first quarter. However, analysts cut the stock because of lower-than-expected sales.
Dell Computer Corp. (DELL) lost 1 5/8 to 39 5/8. Compaq Computer Corp. (CPQ) and Apple Computer Inc. (AAPL) fell 1 and 1 11/16 a share, respectively, while Gateway Inc. (GTW) shed 2 3/4 to 63 ahead of its second-quarter results. IBM Corp. (IBM) ended off 5 to 124.
Sprint Corp. (FON) said its second-quarter profits rose to $386 million, or 44 cents a share, on par with First Call's expectations. Its shares closed off 1 9/16 to 51 5/8. GTE Corp. (GTE) trimmed 3/16 to 76 3/4 and AT&T Corp. (T) closed off 1 to 54 3/4.