Techs Follow the Dow
SAN FRANCISCO - Last week tech stocks didn't accompany the
Dow
on its way up toward 10,000. But they certainly fell hard along with the Dow in today's session.
Losses were widespread and not limited to any one area of the tech sector. PC and chip makers continued to see fallout from Monday's report from
PC Data
that February retail PC revenue dropped 16%.
Dell
(DELL) - Get Report
dropped another 2 3/16, or 6%, to 35 11/16. Also feeling the heat was
Texas Instruments
(TXN) - Get Report
, down 9 1/2, or 9%, at 91 1/4.
Even the darling of darlings in the Internet,
America Online
(AOL)
took a hit. AOL closed 8 3/4 points lower, or 7%, at 121 1/4, but the stock had climbed more than 40 points this month before today.
Courtney Smith, CIO of the
Orbitex Group of Funds
, said Monday's disappointing earnings report from
Micron Electronics
(MUEI)
may have set the stage for today's selloff. While Micron Electronics had already said its earnings would not meet expectations, Smith said the report "confirmed people's fears" that revenues were coming down. It should be noted, however, that Micron Electronics reported earnings through February, and March is considered the key month for PC makers such as
Compaq
(CPQ)
and
IBM
(IBM) - Get Report
.
Also among the Internet stocks under pressure from profit takers was
Network Solutions
(NSOL)
, which closed 13 3/16 lower, or 5%, at 231 9/16. The stock split 2-for-1 after the close of trading today and the new price will be reflected on Wednesday. Price action in
Yahoo!
(YHOO)
was representative of the Net sector. It closed 9 1/2 lower, or 6%, at 155 1/2.
Surprisingly, there were a small number of stocks that performed better today and were thus standouts in what was otherwise a sea of red. Among the day's winners was
CNET
(CNET) - Get Report
, which announced it was buying Internet shopping service
KillerApp
in a stock deal valued at around $46.6 million. CNET closed 1 1/4 higher, or 1%, at 94 1/2.
Also, Compaq closed up 1/2, or 2%, at 30 5/8. The stock may have benefited from implications of Monday's merger between
Comcast
(CMCSA) - Get Report
and
MediaOne Group
(UMG)
. The deal is expected to lead to a merger between
@Home
(ATHM) - Get Report
and
Road Runner
, which is partially owned by Compaq.
And you would think that
AutoWeb
(AWEB:Nasdaq) could not have picked a worse day to begin trading. But the company, which connects car buyers with dealers, closed 26 points higher, or 186%, at 40, just off its session high of 41.
Smith says the tech sector and Nasdaq has been the laggard while the Dow climbed to 10,000, and he expects it to continue to lag over the near term.
"We just got too far ahead of ourselves," he said. "Once we get some value and after we see earnings, I think things will look pretty good."