Big-cap Israeli companies lost ground as Nasdaq dived 3.4% - TheStreet

The Nasdaq Composite index lost 3.41% to 2,470 points on Friday, which comes to an aggregate loss of 40% in 2000. Having already suffered steep losses this year, Internet or dot.com stocks posted the sharpest losses today. The Dow Jones dropped 0.74% to 10,787 points, an aggregate loss of 6.2% for the year. Since 1990, the Dow Jones has not ended the year in negative territory.

It is unlikely that traders will quickly forget 2000, the worst year in Nasdaq's history. But the year got off to a good start as the Nasdaq peaked at 5,048 points in March after the three leading indices, the Nasdaq, the Dow Jones, and S&P 500, ended 1999 at record levels.

Disillusionment set in as revenues models of most dot.com companies failed to deliver the goods, as analyst predictions of meteoric growth in the communications infrastructure sector turned out to be exaggerated, and as more and more companies released profit warnings and negative reports. The year ended with a whimper, the Nadaq 51% short of its March peak.

Israeli shares closed mixed. Big cap companies, which were less hit by the market's slump, today closed in the red.

Mercury Interactive

(Nasdaq:MERQ) dropped 14% to $90.3,

Comverse Technology

(Nasdaq:CMVT) shed 5% to $108.6, and

Check Point Software Technologies

(Nasdaq:CHKP) closed off 4.6% to $133.6.

Much attention centered on

Optibase

(Nasdaq:OBAS), which dived 8.6% to $6.6 after losing as much as 20% earlier. The drops were generated by the profit warning for the fourth quarter of 2000 and for 2001 the company released yesterday.

Optibase, which develops video and audio products for broadband networks, announced it expects to post sales totaling $6.8 million to $7.3 million in the fourth quarter of 2000, against sales totaling $8.3 million in the previous quarter. Granted revenues fall within the predicted lower range, sales are expected to fall 26% short

Robertson Stephens

's forecast.

Optibase expects that its net profit will break-even in the fourth quarter of 2000, excluding one-time expenses, against the forecast EPS of 15 cents, and EPS of 19 cents in the third quarter of 2000.

RADCOM

(Nasdaq:RDCM), which develops tools for quality control of voice and data communications networks, closed unchanged at $2.8, after stock already lost 90% of its peak. Yesterday the company released a profit warning for the fourth quarter 2000. The company said that due to a slowdown in sales to the American market, revenues in the fourth quarter will come short of forecasts. The company expects to post a loss in the range of 4 cents to 7 cents per share, after posting EPS of 5 cents in the third quarter of 2000.

Nice Systems

(Nasdaq:NICE) added 14.6% to $20 after plummeting 61% yesterday following its announcement that because of the slump in the IT sector in the United States it will fall short of forecasts for the fourth quarter of 2000 as well as for 2001, and that it expects a net loss in the fourth quarter of 2000.

Following the profit warning,

Salomon Smith Barney

downgraded Nice from Buy to Neutral, and cut the price target from $90 to $25.

Lehman Brothers

(NYSE:LEH) slashed the target from $75 to $40, and cut 2001 EPS from $2.5 to $1.6.

Several small Israeli companies today rallied after all but crashing in the second half of the year. But this was no comfort to investors who have lost over 90% of their investments. Local Internet provider

Internet Gold-Golden Lines

(Nasdaq:IGLD) leaped 31.7% to $1.7. Tioga Technologies (Nasdaq:TIGA) jumped 14% to $1.8. But

ClickSoftware Technologies

(Nasdaq:CKSW) lost 15.2% and

ViryaNet

(Nasdaq:VRYA) plunged 26.8%.

Gilat Satellite Networks

(Nasdaq:GILTF) dropped 15.2% to a new record low $25.5, after shedding 87% of its peak.. Today's losses were generated by fears that that the company is to release a profit warning for the fourth quarter of 2000. The stock lost favor with investors and analysts alike. The latter claim that the stock's risk level has considerably increased especially because of the uncertainty surrounding the success of the Internet via satellite venture

Starband

(formerly known as Gilat2Home). The venture, in which

Microsoft

(Nasdaq:MSFT) and

EchoStar Communications Corporation

(Nasdaq:DISH) are among the partners, has been operating in the United States for two months, but so far has generated mostly losses, apparently because selling satellite channels to the venture hardly involves any margin of profit.

Constellation 3D

(NasdaqOTC:CFMD) soared 43.3% to $6.4 and

RADWare

(Nasdaq:RDWR) dropped 14.8% to $16.9 after the profit warning for the fourth quarter of 2000 released yesterday by its big rival F5 Networks (Nasdaq:FFIV). RADWare announced yesterday that until its competitor, it expects to meet forecasts for the fourth quarter. But the announcement apparently failed to calm jittery investors who anticipate a slowdown in the Internet traffic-management sector.