The wireless sector and its telecom and equipment brethren sank today under the weight of
earnings warning, and market watchers said the cell phone maker's confession offers a foreboding glimpse of the coming months.
The Espoo, Finland, mobile phone giant, which lowered its second-quarter guidance because of flimsy market conditions, recently tumbled 19% to $23.28 in trading on the
New York Stock Exchange. The stock, hovering close to its 52-week low of $20.55 and sharply off the 52-week high of $62.50, closed Monday at $28.71. Meanwhile, wireless stocks across the board were
losing ground, with the
Philadelphia Stock Exchange Wireless Telecom Sector
off by 5%, while the
Dow Jones Wireless Communication Index
, one of the most heavily-traded outfits on the
Nasdaq, lately tumbled 5.8% to $5.19, while
slipped 8.3% to $13.63. Wireless service providers also took a hit.
was off 4% to $20.59, and
dropped 2.8% to $15.72, but
gained 0.1% to $53.84.
Nokia's warning is one of the first major warnings since
warning a few weeks ago," said Giri Cherukiri, head trader at
Oak Brook Investments
. "It could foreshadow more earnings warnings from tech stocks and the hardware companies. Today's news is a sign that things aren't going to pick up in the immediate future."
Brett Gallagher, head of U.S. equities and deputy chief investment officer at
Julius Baer Investment Management
, an asset management and investment advisory firm, holds a similar view. "We did not believe that the corrections we've had thus far in the market fully reflect the reality," he said. "Investors are still pricing in quicker recovery than expected."
Among other names losing ground,
lately gave up 4.2% to $14.17, while cell phone technology maker
lost 6.1% to $56.18.
, was off 2% to $49.29, after touching a 52-week low of $48.70 earlier today.
, meanwhile, slipped 1.2% to $19.91.
"Nokia is obviously the major story of the day, and everything related to Nokia has been taken down today, including the infrastructure players like Qualcomm," said Gallagher. "
But whether or not it's a surprise is another issue. Our view is that we're going to continue seeing negative surprises on the wireless side, but less so from people like Nokia and more so from the people providing infrastructure for Nokia, like chipmaker
," said Gallagher.
Texas Instruments recently shed 9% to $33.45. Communications chipmaker
Applied Micro Circuits
lost 5.8% to $16.89, and integrated circuits developer
RF Micro Devices
fell 9.3% to $23.95.