Nasdaq Composite Index reversed its recent habit of starting out strong and falling back. As a result, tech investors were much happier by the end of the session.
Scattered action in futures trading gave way to a negative open as another round of profit warnings from computer and software companies roiled the sector. Shortly after noon, the Comp broke into the green, dipped briefly and then rose again. At the end of the day, the gains were nothing to write home about. But hey, at least it's not red. The Comp is still down 13.4% for the year.
Internet stocks performed well with
TheStreet.com Internet Sector
index posting a 2.4% gain. Among the standouts were
, up almost 6% and
up 4.7%. AOL's gains came despite news that Federal regulators are expanding their review of AOL's proposed merger with
to include television set-top boxes.
managed to recover from a preopen trading dip after
analyst Lauren Cooks Levitan said she doubted the company could ever turn a profit with its present business model. Amazon also announced an alliance with privately held photo-finisher
. It ended the day up 94 cents to $36.
E-business software companies
got slapped after warning upcoming earnings will miss estimates because of delayed deals among other factors. Calico slid 31.3%, while Saga sank 32.1%.
was able to escape the same treatment, perhaps because its expected miss is by such a narrow margin. The more likely explanation is that the news of an earnings warning for the second consecutive quarter wasn't exactly shocking in the way bad news from
can send the market -- and particularly the tech portion -- into a major tailspin. Computer Associates rose $3.63, or 14.8%, to $28.06. Go figure.
made a splash in its trading debut, shooting up $15.63, or 86.8%, to $33.63. The San Jose-based company's fiber-optic components and optical modules are designed to boost the performance of optical networks.
Other optical networking stocks enjoyed some upside, particularly
which popped $6.44, or 7.4%, to $94.06.
Semiconductor stocks also helped pull the tech sector into the green, thanks largely to high hopes for
which is scheduled to report earnings after the close. The stock rose 10.3%, while the
Philadelphia Stock Exchange Semiconductor Index
gained 4.2% to $42.
Among stocks with the largest gains on the Nasdaq today were B2B company
, up 15.4% and
, up 7.9%, to $241.94.
3:58 p.m.: Semis Lead the Tech Rebound, Though Warnings Persist
Technology stocks, which took it on the chin yesterday, have staged a decent recovery in afternoon trading.
News that the
Federal Reserve had decided to maintain its tightening bias, added to serious concerns about corporate profits, sent the
Nasdaq down 3.2% Tuesday. The tech-laden index dropped below 3521 -- the intraday low of Aug. 3 -- a level that many technical analysts hoped would bring bargain hunters back into the market.
Today buyers looking for a steal have shown up, but there is still a ways to go before technology investors can feel good about things.
Still, the companies making strides today are worth noting. Chip maker
, which posts fourth-quarter earnings after the bell, was lately ahead 8.1%. The
Philadelphia Stock Exchange Semiconductor Index
was gaining 6.4%.
Shares of semiconductor manufacturer
were up an impressive 13%. Also lifting the SOX were
, up 9.8%, and
, ahead 8.3%.
After tanking 12% yesterday, shares of
have continued to slide 1.9% in recent action. Following a company meeting yesterday with Wall Street analysts,
analyst Eric Upin downgraded the software giant to long-term attractive from buy.
In his research note, Upin wrote that "although we recognize Oracle as one of the pre-eminent names in the software space and a technology bellwether, it is difficult to make an argument for the stock to move meaningfully higher over the near term."
today reiterated its intermediate-term accumulate and long-term buy rating on the database software manufacturer but noted that Oracle "is not immune to the general deterioration in market psychology."
also reiterated its buy rating.
, which hit a new 52-week low yesterday, have slipped an additional 1.4%. Meantime,
was up 5.1%.
By now investors know that an earnings warning is certain to slice a stock's value. Today
fell on the heels of a profit confession. The software manufacturer announced that it expects second-quarter earnings to come in below Wall Street expectations, with revenues down from the first quarter and a year earlier. The company predicts that it will post a 10-to-12-cent result, compared with the analyst prediction of a 24-cent profit. BMC Software was lately trading down 7.1%.
On the flip side, software company
advanced 26.2% after saying that second-quarter results would meet or beat the Street's estimate of 11 cents per share.
In the Net corner, shares of
were all up more than 5%.