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Nasdaq's losses deepen

A batch of earnings reports and better-than-expected economic news couldn't stop the Nasdaq's decline.

A batch of earnings reports and better-than-expected economic news couldn't stop the Nasdaq's decline Wednesday.

The Nasdaq fell 45.64 points, to 1,918.89, after rising slightly this morning following Tuesday's after-the-bell earnings reports from the likes of Applied Materials, Network Appliance and BEA Systems. The Dow Jones industrial average was off 66.22 points, to 10,345.95.

In economic news, business inventories fell more than expected, by 0.4 percent, compared with a drop of 0.2 percent in May, according to a Commerce Department report. Economists were expecting a decline of 0.3 percent.

The Federal Reserve's index of industrial production, a measure of output from the nation's factories and utilities, also came in better than predicted. The index was down 0.1 percent, less than the 0.3 percent economists had foreseen and up from a 0.7 percent decline in June. Capacity use was steady at 77 percent, slightly better than the drop to 76.6 percent economists expected.

Among stocks active after their companies posted quarterly reports Tuesday, Applied Materials rose 9 cents, to $43.74, after the company announced third-quarter income, excluding one-time charges of $41 million, or 5 cents per share. First Call's consensus estimate was for 3 cents a share.

Software maker BEA Systems, which also reported on Tuesday, was off $1.56, to $17.04, after it cut its revenue projections for the second half of the year and said spending on information technology would be even slower than expected.

Dell Computer, scheduled to post quarterly results Thursday, was off $1.07, or 4 percent, to $25.50, as analysts predicted the PC maker would hit estimates in its second quarter but announce lower revenue for its third quarter. Compaq Computer was down 53 cents, to $13.97.

Advanced Micro Devices was down 75 cents, to $14.75, after IBM dropped AMD's processors from PCs sold in the United States and Europe. Since the company doesn't rely heavily on IBM for revenue, the decision has largely meant an image problem.

In a sign that the dot-com implosion isn't over yet, e-tail pioneer Egghead.com, down a penny, to 30 cents a share, announced it is filing for Chapter 11 bankruptcy protection and selling its assets to retail chain Fry's Electronics.

Sun Microsystems, a volume leader on the Nasdaq, lost $1.12, or 7.05 percent, to $14.77, adding to the woes of the hardware sector. CNET's Server Hardware index was down around 5 percent.

Among other heavily traded techs, Veritas fell $3.04, to $34.40, Intel slipped 57 cents, to $29.78, Microsoft shed $1.49, to $63.20, Oracle fell 54 cents, to $15.01 and Cisco Systems slipped 55 cents, to $ 17.

Amazon.com fell 45 cents, to $10.08, AOL Time Warner rose 5 cents, to $39.70 and Yahoo lost 72 cents, to $14.26.

Staff and Reuters contributed to this report.