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Tech Industry

MARKET CLOSE: Microsoft woes sends Nasdaq into free fall

    Microsoft-inspired panic gripped Wall Street Monday as the Nasdaq composite plunged 349 points, or 8 percent, to 4,224.18. Not surprisingly, investors bailed out of the techs in favor of blue-chip issues as the Dow shot up 300 points to 11,221.93.

    The 349-point collapse was the largest in Nasdaq history.

    Microsoft Corp. (MSFT) shares tumbled 15 3/8, or 15 percent, to 90 7/8 on volume of 127 million shares ahead of Judge Thomas Penfield Jackson's ruling on its pending antitrust case.

    Clearly, investors were looking for an excuse to sell after watching tech stocks make unprecedented gains for more than a year.

    "The valuations on tech stocks are so high that they've been an issue for a long time," said Pierre Ellis, a senior economist with Primark Decision Economics. "These stocks have an ownership base that is prone to panic."

    Even Microsoft's most ardent competitors couldn't avoid the selloff as Oracle Corp. (ORCL) slid 1 3/16 to 76 7/8 and Sun Microsystems Inc. (SUNW) fell 3 7/8 to 89 13/16.

    But Microsoft wasn't the only company facing serious problems Monday.

    Legato Systems (Nasdaq: LGTO) plummeted 24 3/4, or 55 percent, to 19 7/8 after it said its 1999 results will likely be cut because its sales representatives entered into unauthorized agreements. Competitor Veritas (Nasdaq: VRTS) shed 19 1/2, or 15 percent, to 111 1/2.

    Parametric Technology Corp. (PMTC) collapsed 10 5/16 to 10 3/4 after it issued a profit warning. It now says sales will fall 15 percent below analysts' estimates and it will likely break even or post a slight loss in the quarter.

    Cisco Systems (Nasdaq: CSCO) slid 4 3/8 to 72 15/16 on news that chief technology officer, Judith Estrin, will leave at the end of April to become an entrepreneur. 3Com Corp. (COMS) lost 5 7/8 to 49 3/4 and Lucent Technologies Inc. (LU) dipped 9/16 to 61 7/16.

    VoiceStream (Nasdaq: VSTR) fell 13 7/8 to 114 15/16 after announcing it's hooking up with Finnish telecom equipment maker Nokia (NYSE: NOK) in a $500 million deal for handset and network expansion. Nokia shares closed off 18 3/8 to 203 5/8.

    JDS Uniphase Corp. (Nasdaq: JDSU) shed 8 15/16 to 111 5/8 on reports that United States antitrust officials have asked it and E-Tek Dynamics Inc. (Nasdaq: ETEK), down 18 5/16 to 216 15/16, for more information on their proposed stock swap.

    BroadVision (Nasdaq: BVSN) fell 1 1/8 to 43 3/4 after it extended its deal with Sun Microsystems, inked a deal with RSW Software, and released the next generation of its e-business software.

    Among widely held PC stocks, Dell Computer Corp. (DELL) dropped 9/16 to 53 3/8; Compaq Computer Corp. (CPQ) added 11/16 to 27 7/16; Gateway Inc. (GTW) inched up 1/2 to 55 1/2 and Apple Computer Inc. (AAPL) closed off 2 1/2 to 133 5/16.

    Intel Corp. (INTC) lost 1 5/16 to 130 5/8 while Advanced Micro Devices Inc. (AMD) and IBM Corp. (IBM) gained 1 15/16 and 3 1/2 a share, respectively.