Wall Street analysts knocked the stuffing out of technology stocks this morning, casting a pall over the entire sector today. Halfway through the trading day, the Nasdaq Composite Index was near its session lows and just underneath the 2900 mark.
Morgan Stanley Dean Witter
took a swing at the networking sector pinata with downgrades on
MSDW cut its price target on Cisco -- which was lately off 4.7% to $50.25 -- to $75 from $90. It downgraded its ratings on Juniper -- lower 18% to $126.56 -- and Redback -- behind 10.5% to $72.25 -- to outperform from strong buy. The investment house decreased its 12-month price target on Juniper to $200, down from $275, and on Redback to $115 from $150.
"The networking stocks' downgrade has made today's market very volatile," said Rob Cohen, head of listed trading at
Credit Suisse First Boston
. "That sector was a holdout for growth at any cost. But people are no longer comfortable with that mindset."
Companies that outfit the networkers with fiber-optic components saw their value dim today, as a result of the MSDW action. Shares of
fell 9.5%, while
staggered 1.8% and
, a leading manufacturer of enterprise software, had recently tanked 13% to $25, on news its bloom has fallen from the rose.
Friday evening, the company announced that Executive Vice President Gary Bloom is leaving to become CEO of
. There was much speculation that Bloom might have been in line to succeed CEO Larry Ellison.
Earlier today, Edward Kerschner, chief global strategist for
removed Oracle from his "highlighted stocks" list and downgraded Oracle to hold from buy.
sliced its recommendations on
. The firm cut Dell, down 7% to $23.19, to buy from strong buy; Gateway, behind 9.4% to $35.99, to hold from buy; and Intel, off 0.7% to $41.25, to buy from strong buy.
At last look, the
Philadelphia Stock Exchange Computer Box Maker Index
had fallen 3.9%, while the
Philadelphia Stock Exchange Semiconductor Index
had decreased 2.7%.
Other fatalities this morning included online auction house
, which was down 20% to $34.75.
dropped eBay to a netural from a buy this morning. The firm's influential analyst, Holly Becker, wrote that she is concerned that eBay's core business is slowing. She also said that the company's aggressive 2005 sales projections may cost more money and require more time than eBay had projected. Last month, eBay reported strong third-quarter earnings and was upbeat about its outlook for coming quarters -- quite an anomaly in the Internet world. But the company's stock hasn't really benefited from it.
Blue-chip stocks have not been immune to the cold winds on Wall Street.
Salomon Smith Barney
cut its rating on soda giant
to outperform from buy, based on added uncertainty surrounding a potential bid to buy
. Coke dropped 6.3% to $57.56 in recent action.
Other Dow losers this afternoon include
, down 2.9% to $141.94, and Microsoft, off 4.1% to $66.19.
Making matters worse today is the continuing political stalemate. "People are reluctant to do anything because of the presidential election," said Bryan Piskorowski, market analyst at
. "They're waiting for an announcement and they don't even know when it will come."
Looking at the big picture,
strategist Jeffrey Applegate, this morning, issued a conservative earnings forecast for the
S&P 500. Applegate, who remains bullish on the index's future performance, said his earnings growth estimates were a little too optimistic.
The strategist cut his third-quarter S&P earnings per share growth to 10% from 13%, but maintained his 2001 price-target of 1800 on the S&P. He wrote that Treasuries will continue to perform well and moved his 20% allocation of cash into bonds.
Breadth was negative on moderate volume.
New York Stock Exchange: 853 advancers, 1,822 decliners, 484 million shares. 47 new 52-week highs, 89 new lows.
Nasdaq Stock Market: 756 advancers, 2,936 decliners, 866 million shares. 11 new highs, 268 new lows.
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Most Active Stocks
NYSE Most Actives
- Nortel (NT) : 17 million shares.
AT&T (T) - Get Report: 10.6 million shares.
General Electric (GE) - Get Report: 7.5 million shares.
Nasdaq Most Actives
- Oracle: 58 million shares.
WorldCom (WCOM) : 29.8 million shares.
Cisco: 23.7 million shares.
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TheStreet.com Internet Sector
had recently dropped 6.5%. Every component in the index was down, with much of the pressure coming from eBay.
was down 4.6% to $48.88 after a French court ordered the site to bar French users from sites selling Nazi memorabilia. Although its French portal doesn't have auctions of such memorabilia, users can easily click to English-language services that do. Yahoo! fought the case, saying its services are governed under the U.S. Constitution and cannot bar Nazi-related material.
Investors have taken shelter today in oil and energy stocks. The
American Stock Exchange Natural Gas Index
was lately up 0.4% and the
American Stock Exchange Oil & Gas Index
had recently gained 0.3%.
Money was also moving from tech and banks to a typical safehaven: gold. The
Philadelphia Stock Exchange Gold and Silver Index
was up 1.6%.
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Bond prices were rallying this morning after they fell Friday. The benchmark 10-year
Treasury note was up 9/32 at 100 19/32, yielding 5.671%.
Bond prices fell Friday with long-maturity issues falling for the first trading session in five sessions, in what market-watchers said was partly a response to the prospect of a
George W. Bush
presidency and partly just profit-taking.
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The London, the
ended down 95.10 to 6345.
Over on the continent, the
in Paris finished off 140.13 to 6021.8 and the
in Frankfurt was 130.6 lower to 6621.7.
The beleaguered euro was lately trading higher at $0.8480.
Asian equity markets were mixed as Tokyo stocks closed lower on uncertainty over the country's political future, while Honk Kong closed higher.
In Tokyo, the
slipped 12.65, or 0.09%, to 14, 531.65.
The greenback was lately trading higher to 109.26 yen.
index rose 1.09%, or 165.81 points to 15,346.66 on strength in defensive banking stocks and telecom
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