Stocks Tumble Further as Internet Sector Takes a Beating

The Treasury market is near unchanged.

Author:: Brian Louis
Publish date:: May 5, 1999 11:58 AM EDT

Internet stocks were down sharply late this morning as the

TheStreet.com Internet Sector

index has tumbled 5%.

The index was down 29 to 586, down 26% from its record closing level, which it set on April 12.

Index component

RealNetworks

(RNWK) - Get Report

was suffering the most, down 19 , or 9%, to 183.

The tech stock-chunky

Nasdaq Composite Index

was down 52 to 2434.

Elsewhere, the

Dow Jones Industrial Average

was down 92 to 10,794. Tech titan

IBM

(IBM) - Get Report

was the biggest drag on the Dow.

The

S&P 500

was down 13 to 1319. The

Russell 2000

was down 6 to 426.

The

Dow Jones Transportation Average

was down 1%, giving back some of the sharp gains it enjoyed yesterday.

The 30-year Treasury bond was up 1/32 to 93 14/32, yielding 5.71%.

On the

New York Stock Exchange

, decliners were beating advancers 1,663 to 1,046 on 368 million shares. On the

Nasdaq Stock Market

, losers were beating winners 2,152 to 1,284 on 424 million shares.

On the NYSE, 33 issues had set new 52-week highs while 12 had touched new lows. On the Nasdaq, 31 issues had set new highs while new lows totaled 41.

On the Big Board,

America Online

(AOL)

was most active, with 22 million shares changing hands. It was down 6 11/16 to 120 7/8.

On the Nasdaq,

Microsoft

(MSFT) - Get Report

was most active, with 14 million shares changing hands. It was down 7/8 to 77 3/16.

Tech Focus

Tech stocks have swooned, as key tech sector proxies were all sharply lower.

The

Nasdaq 100

was down 2%, while the

Morgan Stanley High-Tech 35

was down 3%. The

Philadelphia Stock Exchange Semiconductor Index

was down 2%. The

Philadelphia Stock Exchange Computer Box Maker Index

was down 1%.

In tech news,

Newbridge Networks'

(NN)

warning yesterday after the close that fiscal fourth-quarter earnings will come in around 12 to 14 cents a share has pounded the stock today. Newbridge was down 8 13/16, or 24%, to 28. The First Call 15-analyst forecast had called for earnings of 21 cents vs. the year-ago 12 cents.

Elsewhere, investors cheered

National Semiconductor's

(NSM)

announcement today that it is getting out of the personal computer processor business, sending its stock up 1 11/16, or 12%, to 16 5/16.

The company also said it intends to sell a majority interest in its South Portland, Maine, wafer fabrication plant. The company also said it is cutting 550 jobs via early retirement, attrition and layoffs, including 165 job cuts in Singapore announced in April.

In the Newsletters

Ingram Micro

(IM)

will likely raise prices due to its corporate restructuring and investments in new reseller services, according to an article on

Computer Reseller News'

Web site.

Phil Ellett, executive vice president and president of North American operations at Ingram, said a combo of cost-cutting measures and strategic investments will allow Ingram Micro to service customers in a more efficient manner, the article said.

Ingram stock was down 1/2 to 24 3/16.

11:03 a.m.: Stocks Turn Lower, Adding to Tuesday's Losses

Stocks didn't spend much time in recovery mode after

yesterday's selloff, as the major market averages -- which opened slightly higher -- now have all slumped into the red.

The losses, so far, however, have been modest. Meanwhile, the 30-year Treasury bond was weaker, down 3/32 to 93 9/32, yielding 5.72%, giving up an earlier advance.

The

Dow Jones Industrial Average

was down 33 to 10,853.

The

S&P 500

was down 6 to 1326. The

Nasdaq Composite Index

was down 22 to 2463. The

Russell 2000

was down 2 to 430.

TheStreet.com Internet Sector

index was down 16 to 599.

Financials had been a little firmer earlier -- but leading bank and brokerage proxies have since fallen into the red. Financials suffered significant losses yesterday.

Louis Todd, head of equities trading at

J.C. Bradford

, noted that

J.P. Morgan

(JPM) - Get Report

Citigroup

and

American Express

(AXP) - Get Report

were among financials that endured sizable losses yesterday. Todd said part of the reason for the selling in financials was due to portfolio managers dumping financials in order to buy

Goldman Sachs

(GS) - Get Report

stock. Yesterday was the white-shoe firm's first day trading as a public company. Shares of the investment bank were giving back some of yesterday's gains this morning and the stock was down 2 7/8 to 67 1/2.

Looking ahead, Todd said the market will particularly focus on

Federal Reserve

Chairman

Alan Greenspan's

speech slated for tomorrow in Chicago. The G-Man will be delivering the keynote address at the

Chicago Fed's 35th Annual Conference on Bank Structure and Competition

. The conference, "Global Financial Crises: Implications for Banking and Regulation," runs Thursday through Friday.

On the economic front, on Friday, the April

employment report

is slated for release.

Market players will continue to keep an eye on the bond market, which has suffered some big losses lately. Todd said the action in the bond market of late has got some people worried.

Todd also said the upcoming gathering of the

Federal Open Market Committee

meeting "might be unnerving" for the market. The FOMC is scheduled to meet on May 18.

On the

New York Stock Exchange

, decliners were beating advancers 1,351 to 1,221 on 258 million shares. On the Nasdaq, losers were beating winners 1,769 to 1,383 on 283 million shares.

On the NYSE, 28 issues had set new 52-week highs while 9 had touched new lows. On the Nasdaq, 29 issues had set new highs while new lows totaled 20.

On the Big Board,

America Online

(AOL)

was most active, with 15 million shares changing hands. It was down 8 to 119 91/8.

On the Nasdaq,

Microsoft

(MSFT) - Get Report

was most active, with 8 million shares changing hands. It was up 3/8 to 78 3/8.

10:02 a.m.: Stocks Up Slightly After Tuesday's Selloff

Stocks rose slightly in the early going in the wake of

yesterday's widespread selloff.

The

Dow Jones Industrial Average

was up 37 to 10,924.

The

S&P 500

was up 4 to 1336. The

Nasdaq Composite Index

was up 1 to 2486. The

Russell 2000

was up fractionally to 433.

TheStreet.com Internet Sector

index was down fractionally at 615.

The 30-year Treasury bond was up 7/32 to 93 21/32, yielding 5.70%.

In the news,

Procter & Gamble

(PG) - Get Report

said it is in the process of soliciting bids for its

Prell

hair care brand. Procter & Gamble said if it doesn't get an acceptable offer for Prell, it will retain the brand. Procter & Gamble was up 1/2 at 92 1/4.

Goldman Sachs

(GS) - Get Report

, which made a sterling trading debut yesterday, was down 1 13/16 to 68 9/16.

Most Up at Open -- NYSE

Time Warner (TWX) , up 2 7/16 to 69 1/2

Most Up at Open -- Nasdaq

priceline.com (PCLN) , up 7 3/16 to 141 3/16

: The company yesterday reported a first-quarter loss of 12 cents a share, a penny narrower than the

First Call

five-analyst outlook.

Most Down at Open -- NYSE

Newbridge Networks (NN) , down 9 5/16 to 27 1/2

: Newbridge yesterday warned that fiscal fourth-quarter earnings will come in around 12 to 14 cents a share. The

First Call

15-analyst forecast called for earnings of 21 cents vs. the year-ago 12 cents.

Most Down at Open -- Nasdaq

Autodesk (ADSK) - Get Report, down 4 5/8 to 23 7/8

: The company warned yesterday it sees first-quarter pro-forma earnings of 10 to 15 cents a share and diluted earnings of 2 to 5 cents a share due to customer transition in the company's product line. The First Call 10-analyst view called for a profit of 40 cents vs. the year-ago 55 cents.