Tech stocks wandered around today like a small child who's lost her mom in a crowded department store, sniffling and waiting for someone to grab her by the hand. But there wasn't a lot of hand-holding to be found today, just a passel of earnings warnings and ominous news.
Still wincing from bad news about PC demand, the
Philadelphia Stock Exchange Computer Box Maker Index
closed down 2.1%.
, downgraded to neutral from attractive this morning by
, closed down 75 cents, or 2.3%, to $31.25, even after its CEO defended the company's earnings estimates to analysts yesterday.
The Philadelphia Stock Exchange Semiconductor Index
also went down 1.8% on an earnings warning by
And No. 1 e-tailer
TheStreet.com Internet Sector
index down 2.7%. In a note today,
lowered its 12-month target price for the stock from $40 to $30. Amazon finished down $2.25, or 9.5%, to $21.37.
was one of tech's brighter spots today, thanks to a note from
. Analyst Thomas Berquist initiated coverage of the business-to-business software company, putting it on the recommended list, writing that Ariba is the "clear leader for indirect material procurement." Ariba closed up $4.50, or 6.4%, to $75.
At the other end of the happiness scale was e-business software producer
. The company felt compelled to put out a press release correcting what it believed was inaccurate information stemming from the comments from
Credit Suisse First Boston
. The company's release said that analyst Brent Thill indicated that
General Electric's Capital
division was "pulling" its BroadVision account.
Not so, said Thill. All he wrote was that a BroadVision project in a G.E. division was deferred. And that a person who worked on it had said it was stopped because it was way over budget. And that it would not have a large financial impact but was worth noting.
One BroadVision project at a single Web site within G.E.'s Financial Assurance division
deferred, said G.E. spokesman Jeff DeMarrais. But the note easily could be interpreted to mean that an entire division was pulling BroadVision from the many sites of its multiple companies.
After the comments hit the broadcast media, BroadVision's shares plummeted.
"Everyone had the impression that we lost the (G.E.) account and that wasn't true," said BroadVision spokeswoman Amber Rowland.
Just doing my job, said Thill, who maintains a buy rating on the stock (CSFB has no underwriting relationship with BroadVision).
"We're not trying to rip them up. My goal is to let people know and fully understand what's happening in the channel."
BroadVision closed down $2.75, or 11.3%, to $21.56.
Along with the earnings warnings have come the layoffs.
, which has been trading for pocket change since
killed its merger last week, is the latest. The DSL wholesaler will cut 248 jobs or 19% of its workforce. NorthPoint closed flat today at 37 cents per share.
announced this morning it was laying off 125, or 17% of its workforce. After a downgrade by
this morning to perform from market outperform, Viant closed down 13 cents, or 2.9% to $4.13. The layoffs follow
announcement of the layoff of 25% of its employees this morning.
2:22 p.m. ET: Warnings Stalk Skittish Tech Stocks
The ghosts of earnings warnings past, present and future are stalking tech stocks today and even 800-pound gorillas got a visitation. Citing the effects of a PC demand slowdown,
analyst Rick Sherlund trimmed his financial projections for computing giant
for the current quarter and upcoming two quarters. Sherlund wrote that his model had assumed 10% to 15% growth in retail PC demand, while recent data indicated that growth would be flat.
analyst Chris Shilakes followed with a note acknowledging a "somewhat cautious stance toward Microsoft in the near term." Shilakes wrote that weakening consumer demand and new competitors to PCs, such as the Sony PlayStation 2, would pressure the 10% to 15% of Microsoft's business represented by the desktop. Microsoft was trading down $3.94, or 6.9%, to $52.75.
, which lost 14.5% yesterday after Merrill Lynch analyst Henry Blodget cut revenue estimates for the first two quarters of 2001, was losing again today on a downgrade by
. Analyst Derek Brown reduced his rating on the dominant Web portal to neutral from buy because of deteriorating online advertising. In recent trading, Yahoo! was down $3.56, or 9.5%, to $33.94 and has lost 45.3% in the past month.
More woes from the Internet came from e-consulting firm
, which announced it likely would have an operating loss of 16 cents per share, way off the Street estimate of an 8-cent profit per share. Scient announced it would lay off 460 employees, about 25% of its work force and close offices.
Morgan Stanley Dean Witter
downgraded Scient to neutral from outperform, and did the same for fellow consulting firms
. Scient was trading down $1.84, or 41%, to $2.65. Razorfish was off 5.2% and Breakaway was down 3.1%.
Things soured early, when
announced it would come in significantly below estimated revenue for the fourth quarter, citing a buildup in inventory from phones and from chips. Motorola, which has dropped 26.2% in the last month, was trading down 50 cents, or 2.8%, to $17.31, a 52-week low.
was downgraded from accumulate to neutral this morning by analyst Joe Osha. The analyst stated that he believed "more problems are coming."
Sure enough, National Semi announced that while it handily beat revenue and EPS estimates for this quarter, it expected a decline in sequential revenue next quarter. National was declining in recent trading 75 cents, or 3.7%, to $19.25, and the stock has dropped 16.9% during the past month.
recent warning and
announcement about inventory stockpiles last month are hurting contract manufacturer
analyst Scott Heritage downgraded Solectron to hold from buy because of its ties to both companies. Cisco is Solectron's second-largest customer, Heritage wrote. And Solectron is buying Natsteel, a Singapore-based contract manufacturer of circuit boards that receives about 50% of its revenue from Apple. Solectron lost 4.1% on the news yesterday. A defensive note from Merrill Lynch notwithstanding, the company's shares in recent trading were down $3, or 10%, to $26.85, their lowest level since June 1999.
announcement today that it beat revenue and earnings estimates for the quarter didn't seem to impress investors. Despite the news, Ciena was trading slightly down $2.13, or 2.2%, to $93.25.