Tech Stocks Take a Plunge

Also in earnings, Northrop Grumman (NOC Quote) narrowly beat analyst expectations, earning $1.11 a share in its quarter, a penny ahead of expectations. The company's profit slipped from $1.73 a year earlier, despite a 46.9% surge in revenue. The stock gained $1.10, or 1.1%, to $99.10.

Polo Ralph Lauren (RL Quote) said its fiscal second-quarter profit held steady at 47 cents a share, matching the consensus estimate. The shares shed 22 cents, or 0.7%, to $30.05.

Tommy Hilfiger (TOM Quote) said its quarterly earnings fell to 28 cents a share from 38 cents a year ago, on a 5.6% decline in sales. Nevertheless, the apparel manufacturer easily beat forecasts by 15 cents. Tommy stock improved $1.57, or 12.3%, to $14.30.

Harrah's(HET Quote) said Wednesday that it earned 50 cents a share in the fourth quarter, excluding items, compared with analysts' projections for 53 cents a share. Revenue was up 3.6%. The shares plunged $3.80, or 7.1%, to $50.

PepsiAmericas(PAS Quote) had fourth-quarter earnings of 23 cents a share, excluding items, beating analysts' consensus for 19 cents a share. Total sales were up 8%. The stock improved 12 cents, or 0.7%, to $17.34.

And Oxford Health(OHP Quote) said it had a profit of $1.14 a share in the fourth quarter, on a 6% increase in sales. Analysts had been expecting $1.07 a share. The company's stock fell 21 cents, or 0.5%, to $46.82.

In research, UBS initiated coverage of Sun Microsystems(SUNW Quote) with a neutral rating and Merrill Lynch reinstated coverage of Yahoo!(YHOO Quote) with a neutral rating. Sun stock fell 36 cents, or 6.6%, to $5.12, while Yahoo! slipped 54 cents, or 1.2%, to $44.95.

On Thursday, earnings highlights include Alcatel (ALA Quote) and PepsiCo (PEP Quote), both due before the opening bell.

In economics, initial jobless claims and productivity growth will be released at 8:30 a.m. EST; both reports could have implications for Friday's crucial January labor report. Claims for the week ended Jan. 30 are expected to fall by 2,000 to 340,000, making it 18 consecutive weeks under the key 400,000 level, which is thought necessary for job market improvement.

Productivity growth is expected to decelerate to 3% in the fourth quarter from 9.4% previously. Economists blame strong productivity gains for the economy's inability to add jobs despite robust growth.