Semiconductors and the Internet services sectors tugged on the
today, which settled 115.03, or 3.4%, lower at 3240.53.
TheStreet.com Internet Sector Index
also settled 18.97, or 3.08%, lower at 597.32 in tandem with
which felt pressure in front of its post close
third-quarter results .
Semiconductors reacted to the simultaneous
by analysts at
Salomon Smith Barney
(check below for details).
The semiconductors' stroke of bad luck dominated the tech news today but
was another big
loser. The telecom-equipment maker said it expects next quarter's profits to be lower than expected. Lucent today said the company expects to earn between 17 to 18 cents per share. Analysts had expected earnings of 27 cents a share, according to
First Call/Thomson Financial
. Lower earnings are due to lower revenue from its optical-networking business, decline in the sale of traditional voice products and potential bad loans to service provider customers.
This is the second earnings shortfall for Lucent, which has been in the midst of major restructuring.
2:37 p.m.: Semiconductor Stocks Slammed as Analysts Fire Big Guns
were hurtling lower and spreading trouble to the semiconductor sector after
Salomon Smith Barney
downgraded the chipmakers on concerns about semiconductor demand.
"Revenue growth rates for the next two quarters are likely to slow noticeably" as the chips become more available and as customers balance inventory levels, Lehman Brothers
analyst Dan Niles wrote in a report to clients. He downgraded both companies to neutral from outperform. Salomon Smith Barney analyst Clark Westmont slashed both companies to outperform from buy.
Altera was down 22.3% and Xilinx was down 20.7%, even though both companies put out statements meant to reassure investors that their growth remains robust.
The whole semiconductor sector took the analysts' remarks personally, as the
Philadelphia Stock Exchange Semiconductor Index
plunged 10.3%, led by such bellwethers as
, which fell 3.4% and 7.4%, respectively.
In past quarters Xilinx and Altera have enjoyed demand that outstripped supply, plumping their stock prices 74% and 65% this year, respectively.
Niles added that the increased shipment of chips will not hurt financial results for the most recent quarters, but may affect estimates for the next two quarters.
Remember the telephone? You used to use it before they invented email and instant messenger. Well, in the most exciting pairing since peanut butter met chocolate, popular portal
and Internet telecom company
have started a
service that lets computer users make free phone calls over the Web. Yahoo! will also offer a service that will read voice mail, email and other information, such as stock quotes and news headlines, over the phone to registered users.
Net2Phone has been distributing its PC2Phone software application free through the Internet and through strategic partnerships since 1996, but partnering with one of the most recognized brand names in cyberspace has given it the star power to really take off. Yesterday Net2Phone hit a 52-week high of $19.56, and it was powering $1.63 higher to $22.19 today.
The market's eyes, however, are glued on Yahoo! not for its ambitious expansionist policies but for its third-quarter financial results. Last year it posted profits of 7 cents a share, but those were different times, when investors had boundless confidence in the buoyant tech sector.
This just in: The tech sector is no longer buoyant. Today
TheStreet.com Internet Sector
DOT, has traded as low as 598.22 today. The levels the DOT has hit in the last few sessions haven't been seen in more than a year, and the
Nasdaq Composite Index is little healthier.
So caution lately continued to rule as traders applied pressure in front of Yahoo!'s after-hours announcement. Wall Street expects the portal to produce a profit of 12 cents a share, same as last quarter. Hopefully the company's will imitate
knack for conquest instead mimicking the French dictator's stature, by falling short.
have high hopes for tonight's results, reiterating their buy rating on Yahoo! with a price target of $200. The stock lately was off $1.25 to $84.50.
"The dot-com advertising slowdown, exacerbated by the
preannouncement, has recently weighed on shares of Yahoo!," said a Jefferies morning research note. "We expect third-quarter results to meet or exceed our estimates, allaying some of the fears about an advertising slowdown."