Pulse: Dell's Stumble Draws Blood Throughout Techland - TheStreet

After trying for a bit of a comeback in midafternoon action and getting just short of the flat line, the

Nasdaq Composite Index gave up hope and slumped back into the red.

Amid speculation that the Comp is forming a bottom, traders said the tech-heavy index likely wouldn't venture much lower than 3380 in coming days. But it probably will take some pretty stellar earnings reports and great conference calls on coming quarters to turn the sulking index around.

Micron Technology

(MU) - Get Report

reported blowout earnings last night, but concern over weakness in chip prices lead ABN Amro to cur its price target. Investors dragged the stock, and the rest of the semiconductor sector, through the mud today. Dell closed down $3 to $25.19, off 10.64%, and the

Philadelphia Stock Exchange Semiconductor Index

lost 3.55%.

The Nasdaq was off 51.01, to 3472.09.

But an earnings warning from PC-maker

Dell

(DELL) - Get Report

was the real culprit for today's selling. Dell blamed a familiar phantom -- the weak euro -- as well as slow demand from beleaguered cash-poor small businesses.

Only the most recent in a slew of high-profile tech earnings warnings, Dell's drop did not take as big a bite out of the Nasdaq as its predecessors

Intel

(INTC) - Get Report

and

Apple

(AAPL) - Get Report

, which warned late last month.

But it certainly cut into the tech hardware sector, whacking Nasdaq stocks

Apple

(AAPL) - Get Report

and

Sun Microsystems

(SUNW) - Get Report

, which fell 6.6% and 1.53%, respectively. Dell's malaise also spread to

Cisco

(CSCO) - Get Report

, while

Oracle

(ORCL) - Get Report

made a comeback after slipping earlier.

Some concern over earnings in the PC, semiconductor, communications equipment and photonics sectors from

Merrill Lynch

this morning didn't help tech stocks either.

The

Philadelphia Stock Exchange Computer Box Maker Index

fell 5.29%, while the the

Nasdaq Telecommunications Index

was down 1.53%.

Some of the bigger telecoms, like digital wireless technology firm

Nextel

(NXTL)

and communications and networking company

WorldCom

(WCOM)

got the cold shoulder, closing down 12% and 8%, respectively.

Internet stocks were still smarting from some negative comments on

Amazon.com

(AMZN) - Get Report

yesterday when they got hit by this morning's

priceline.com

(PCLN)

news. priceline.com announced this morning that it was ditching its gas and groceries licensee Webhouse, and investors didn't like that at all.

Robertson Stephens

analyst Lauren Cooks Levitan said the world's leading Internet retailer might be overextending itself with the recent addition of a new product category.

priceline.com, which had already lost about half of its value since since issuing a third-quarter profit warning on Sept. 27, fell another 38% to $5.86 on the day, while Amazon.com dropped 6.7% to $33.56.

TheStreet.com Intrenet Sector

index slid 3.57%.

Optical stocks, meanwhile, rose tentatively today after succumbing to the Nasdaq's pain late last week and staying in the red through Tuesday. Widely assumed to be the new leadership in tech, optical stocks escaped the September selloff, and some say that recent weakness was a sign that the Nasdaq was indeed forming a bottom. Leadership stocks often don't get hit until the very bitter end.

Two of investors' sector favorites,

Ciena

(CIEN) - Get Report

and

JDS Uniphase

(JDSU)

, finished the session up 2.4% and 1%.

Alas, biotechs seemed like the Nasdaq's lone stars as they rebounded after a week long slide. The

Nasdaq Biotechnology Index

up 1.03%, was boosted by names such ase

Amgen

(AMGN) - Get Report

and

Immunex

(IMNX)

, which closed up 3.4% to $66.63 and 5.3% to $40.06, respectively.

12:41 p.m.: Dell Warnings Wallop Boxmakers

After a steady open, technology stocks appear to be fading, with only high-growth fiber optics companies seemingly bucking the trend today.

Dell's

(DELL) - Get Report

warning yesterday has sunk that stock along with the rest of the computer manufacturers', and investors are also taking a pound of flesh out of

Micron Technology

(MU) - Get Report

, which reported third-quarter earnings last night.

Dell was lately off 8% after announcing that weak European demand was likely to shave 1 cent to 2 cents off the company's fourth-quarter earnings figures. The

Philadelphia Stock Exchange Computer Box Maker Index

was down 4.8%.

Micron Technology reported strong third-quarter earnings, but the company's fiscal third quarter ended Aug. 31, before spot DRAM prices (dynamic random access memory) prices fell sharply in September due to concerns over hoarding by PC makers and weakened demand.

TheStreet.com

discussed this in a

story prior to Micron's earnings release.

Analyst action on Micron has been mixed today, though the stock was faltering, lately down 10.1%.

UBS Warburg

cut its earnings estimates on the company, citing demand concerns, but other analysts reiterated existing ratings. Right now, investors continue to accentuate the negative. The

Philadelphia Stock Exchange Semiconductor Index

was lately down 3.1%.

Internet stocks are taking it on the chin today. After announcing that it would

shutter its online grocery business,

priceline.com

(PCLN)

is staggering today, having lost $2.78, or 29.7%, to $6.59 today. The company's current market capitalization is $1.1 billion, and since

issuing a third-quarter results warning Sept. 27, the stock has lost about 50%.

TheStreet.com Internet Sector

index was reeling, down 2.2%.

Amazon.com

(AMZN) - Get Report

was off 7.6%, and

eBay

(EBAY) - Get Report

was down fractionally.

Big-cap technology stocks are collapsing under the weight of valuation concerns and lack of confidence in the current economic slate.

Merrill Lynch

held a generally upbeat technology earnings preview this morning, but expressed concern in a number of sectors, including PCs, semiconductors and communications equipment and photonics companies.

Cisco

(CSCO) - Get Report

was lately down 1.8%, and

Oracle

(ORCL) - Get Report

was off again, down 0.4%.

Communications equipment companies are having a hard day.

Sun Microsystems

(SUNW) - Get Report

was losing ground, down 2.2%, while software storage leader

EMC

(EMC)

was down again as well, losing 4%.

Among the stocks digging in are the fiber optics companies, regarded as furthest out on the curve in terms of technological advances. Viewed as the preeminent growth stocks, they haven't been hit as hard as most of the rest of the technology arena.

Ciena

(CIEN) - Get Report

was lately up 2.7%,

Corning

(GLW) - Get Report

gained 1.3% and

JDS Uniphase

(JDSU)

rose 0.8%.