Motorola's (MOT) earnings warning this morning was discouraging, but certainly could not be blamed for today's selloff in the technology sector. Rather, ongoing reallocation out of technology and into the once-shunned blue-chips kept pressure on tech and suggested that lows from last week may be tested again.
ended the day down 132.30, or 3.2%, at 4055.90.
TheStreet.com Internet Sector
index closed down 54.21, or 5.7%, at 905.84, while
TheStreet.com New Tech 30 finished off 76.43, or 11.3%, at 599.85.
While Motorola's earnings warning was somewhat of a disappointment for the sector, direction could, in fact, be determined by a number of high-profile earnings reports scheduled tomorrow, according to one trader. The trader said
Check Point Software
, which all report tomorrow, are "solid companies" that are "favorites of institutions." He also said he expects all three to report good numbers, and for market analysts to talk up the stocks.
The trader also said he expects stocks to ramp up into earnings, then sell off afterward even if the numbers were solid. The recent Nasdaq downswing has changed things, and he said he'll now just try to ride the momentum of the market. Investors will most likely buy Check Point, Ariba and Redback on good earnings, he said, but the key will be how aggressively profit-takers and shorts sell into any rally.
Check Point closed down 10 15/16, or 6%, at 169 1/2; Ariba finished down 9 3/16, or 10%, at 81 9/16 and Redback Networks dropped 18, or 13.6%, to 114 3/4.
Among more traditional plays,
postearnings blues persisted. It closed down 8 7/16, or 6%, at 133 1/2. Among other decliners,
closed down 14 3/16, or 11%, at 112 1/4;
finished down 26 3/16, or 16%, at 135 1/16;
dropped 14 3/4, or 6%, at 223 1/4 and
lost 25 9/16, or 19%, at 107 3/4.