Tech Stocks Continue to Slide
Friday, February 23rd 2001, 12:00 am
News On 6
NEW YORK â€“ Sellers dominated Wall Street for a fifth straight session today after earnings warnings from Motorola and Sun Microsystems sent stocks sliding once again.
The Nasdaq composite index, already at its lowest level in more than two years, continued its descent as investors fled from technology and other stocks they viewed as risky in a weak economy.
"Investor confidence continues to get shaken to the bone" by these profits warnings, said Tom Galvin, chief investment office at CSFB. "It's pretty clear that they have given up buying on the dips in the market."
In late morning trading, the Dow Jones industrial average was down 107.16 at 10,419.65.
Broader stock indicators also fell. The Nasdaq was off 49.92 at 2,195.04 while the Standard & Poor's 500 index slipped 18.26 to 1,234.56.
All three indexes are now down for 2001. The Nasdaq is 56 percent off its all-time high of 5,048.62, reached last March.
Stocks opened down after Motorola reduced its first-quarter outlook for a second time in two months, citing declining demand for its cell phones and computer chips. The warning came a day after Sun Microsystems also warned the weak economy would hurt its revenues.
Motorola fell 90 cents to $16.39 and Sun Microsystems was off 56 cents at $20.25 in morning trading.
Other tech stocks also fell, including Dow component IBM, which was off $5.30 at $103.60.
Weakness in financial and pharmaceutical stocks also pulled the blue chip index lower. Banker J.P. Morgan Chase dropped $1.06 to $47.24 and Johnson & Johnson lost $1.11 to reach $95.41.
The losses were the latest indication of investors' worries that a better economy, and stronger corporate profits, may be a long way off.
Analysts say increasing signs of an economic slowdown â€“ including economic data and incessant corporate profit warnings â€“ have made many on Wall Street hesitant to buy stocks.
Declining issues outnumbered advancers by nearly 2 to 1 on the New York Stock Exchange. Volume came to 321.04 million shares, compared with 415.05 million at the same point Thursday.
The Russell 2000 index fell 7.41 to 469.85.