The Night Watch: Tech Casualties Staunch Bleeding After Hours
(Updated from 6:35 p.m. EST)
Late-night lurkers were spending more time resurrecting gray leftovers into something resembling food than trading stocks. Volume was thin on both
Instinet
and
Island
ECN, two places where stocks trade all night long. And speaking of carcasses, like vultures after the first feeding, traders were picking over the flayed and scorched remains of technology stocks.
People who were long
Ariba
(ARBA)
,
Juniper Networks
(JNPR) - Get Report
and
Broadcom
(BRCM)
can stop mashing the panic button. After a daytime session that saw all three on Nasdaq's list of biggest losers, Ariba, Juniper and Broadcom, which represent business-to-business, networking and communications, respectively, rose from their New York closes on thin trading.
Ariba's day was doomed from the start after both it and competitor
Commerce One
(CMRC)
were cut by
Wit Soundview
. Wit's analyst, David Mahoney, cut Ariba's 52-week-price target to $52 and Commerce One's to $39, while dropping both to a hold rating from a buy rating. In the report announcing these new changes, Mahoney wrote: "While Ariba and Commerce One have dropped significantly, we still do not believe that the current stock prices adequately reflect the limited opportunity for simple procurement and marketplace applications."
The phrase "limited opportunity" hit the once-hot business-to-business sector, now led by Ariba and Commerce One, like a sweat sock filled with nickels. Basically, Mahoney said that business-to-business didn't look like it'd be the cash cow that everyone thought it would be and not only deserves the beating it's taken in recent weeks, but also probably deserves a few more kicks to the teeth.
Tonight, those kicks ceased. After closing in New York at $67, a drop of $9.94, or 12.7%, Ariba closed the night session at $68.62 over on Instinet. Commerce One, off $3.69, or 9.4%, to $36 during the day session, finished at $35.98 over on Instinet, relatively unchanged. On Island Ariba was at $68.49. Lick those wounds, guys.
Juniper was another wild and wooly stock, even more disappointing than the agonized, screaming issues over in business-to-business. Nope, this Calif.-based Internet infrastructurer was a heartbreaker, closing the New York trading day with a loss of $7.75, or 5.9%, to $123.75. The company actually had a $7 gain just after the opening bell, but as trading volume fell off during the day, so did Juniper's stock price. It ran out of gas.
In after hours, the company shored up those day-session losses a bit. It last traded at $125.50 on Instinet and $125.88 on Island. Competitor
Cisco
(CSCO) - Get Report
, which closed the New York day at $51.25 with a 2% loss, last traded at $51.63 on Instinet and $51.38 on Island.
And then there was one.
Broadcom
(BRCM)
.
In the month of November, this company has performed worse than Whitney Houston after a week slumming on Hollywood Boulevard. It opened November at $222.38. And it closed today in New York at $97.56, with a session loss of $19.50, or 16.7%. Tonight, the bleeding has stopped, but the healing really isn't too dramatic. Maybe some scabbing. But honestly. No.
It last traded at $97.75 on Instinet, a gain of 19 cents from where it closed at 4 p.m. Over on Island, it traded at $98.31.
One reason for Broadcom's loss during regular trading was an analyst downgrade. But the company has also been reeling from litigation with
Intel
(INTC) - Get Report
, negative reaction to its $2 billion purchase of
SiByte
and worries about its future earnings.
The downgrade was by
Salomon Smith Barney
analyst Clark Westmont, who cut his 52-week-price target to $200 from $300, citing signs of slowdown. Investors' fears, far from assuaged, grew more and more severe as the day wore on. Broadcom was taken to the woodshed and beaten. Tonight traders put the paddle away.
This information is provided by Instinet, a wholly owned subsidiary of Reuters (RTRSY) . For further information, please contact Instinet at www.instinet.com.
Island ECN, owned by Datek Online, offers trading, mainly in Nasdaq-listed stocks, from 7 a.m. to 8 p.m. EST.
Confused?
TheStreet.com
explains how the rules change when the sun goes down in Investing Basics: Night Owl, a section devoted to after-hours trading.
