(Updated from 7:43 p.m. EST)
There was a new round of earnings disappointments tonight, and the technology companies responsible were fried on the post-close market.
After the closing bell,
, a manufacturer of Internet networking products, announced that it expects to post fourth-quarter earnings below analysts' predictions, due to a recent shift in spending on communications infrastructure.
Shares of Foundry Networks dropped 45.1%, to $16.81, on
and plunged 41.9%, to $17.80, on
Foundry said that it plans to report fourth-quarter earnings of 11 cents to 14 cents per share. According to
First Call/Thomson Financial
, Wall Street analysts anticipated the company would earn 24 cents per share. The company forecasts revenue of $100 million to $110 million in the upcoming quarter.
, a rival to Foundry, dropped 24.1%, to $36.88, on Instinet and moved down 23.8%, to $37, on Island.
In other company news,
, an electronics contract manufacturer, announced earnings that fell below analysts' targets, citing shortages of key components.
As a result, Jabil Circuit decreased 23.6%, to $21.25, on Instinet.
Earlier this evening, the company posted first-quarter earnings of 24 cents a share, compared to 17 cents per share in the year-ago period. Analysts surveyed by
First Call/Thomson Financial
had forecast earnings of 26 cents per share.
This afternoon, at 2:15 p.m. EST, the
Federal Reserve announced that it would leave interest rates unchanged at its meeting today and suggested it will lower rates in the near future, perhaps as soon as its next meeting on Jan. 30 - 31.
Although it left rates unchanged, the Fed moved from a tightening bias, which essentially means that it believes the risk of inflation is greater than the risk of recession, to an easing bias, which means that it believes the risk of recession is greater. Today the Central Bank said the risks facing the economic expansion "are weighted mainly toward conditions that may generate economic weakness in the foreseeable future." That statement implies that the Fed will lower interest rates to stimulate the economy to prevent a recession. (
discussed the outcome of today's meeting in a separate
On the heels of today's announcement, technology stocks slid, as investors seemed disappointed that the Fed had stopped short of a rate cut: The Nasdaq was pummeled in the final two hours of the regular session, closing down 4.3% at 2,511, a new 52-week low. Tech stocks continued to slide on the night watch.
, which dropped 2.77%, to $41.75, during the regular session and hit a fresh 52-week low of $41.50 at one point today, shed a further 3.9%, to $40.13, on Instinet and lost 0.2%, to $41.69, on Island.
Fellow networking stock
, which dropped 11.7% during the day, lost an additional 9.9%, to $102.50, on Instinet and sank 7.5%, to $105.25, on Island.
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