Nasdaq thrashed again, Investors still fleeing tech shares for Dow

The spring mudslide in technology stocks continued Monday as investors rushed again to the safety of the more staid stocks of the Dow Jones industrial average.<br><br>Technology investors were sent scurrying

Tuesday, April 25th 2000, 12:00 am

By: News On 6

The spring mudslide in technology stocks continued Monday as investors rushed again to the safety of the more staid stocks of the Dow Jones industrial average.

Technology investors were sent scurrying after Microsoft Corp. said it wouldn't meet its quarterly revenue projections. But most analysts viewed the announcement as just another excuse to continue selling.

"The bloom is off this rose and reality is setting in that it may be awhile before technology comes back," said Alan Skrainka, chief market strategist for Edward Jones & Co. in St. Louis. "This is very much the same trend that has been in place since early March."

The Nasdaq composite index, home to most of the brand-name technology companies, has been violently whipsawed since it peaked at 5,048 on March 10. It's down 31 percent from its high and 14.4 percent for the year so far.

Over the last month, the index has made five attempts to rally - the most recent being early last week - but each rally is followed by even steeper declines. The Nasdaq fell 161.40 points Monday, or 4.4 percent, to close at 3,482.48, but the damage could have been even worse.

A rally in the last half-hour of trading brought the index back from a decline of 298 points, or 8 percent.

"At the moment, investors are throwing out all the techs, no matter if they have good earnings prospects or not, said Bob Cordiak, senior vice president for investments at Dain Rauscher Inc. in Dallas.

While the Nasdaq was reeling, the Dow posted a respectable 62.05-point gain to close at 10,906.10.

The Dow is down 5.1 percent so far this year, but it has regained more than 1,000 points over the last month.
The broader Standard & Poor's 500 index dropped slightly, 4.68 points to 1,429.86. Four stocks fell for every three that rose on the New York Stock Exchange.

"Investors are looking for safety outside of technology," said Mr. Cordiak.

And they found it in the blue chip financial stocks, such as American Express, which climbed $7.06 a share to $150.06 after it reported earnings that surpassed Wall Street's expectations. Investors also continue to buy the drug sector, pushing shares of Warner-Lambert up $4.69 to $118.13.

But shares of Microsoft plummeted $12.31, or 15.6 percent - its biggest loss in 13 years - to close at $66.63. Microsoft shares are down 43 percent this year.

The table was set for this plunge Thursday when the giant software maker said third-quarter revenue rose less than expected.

Further, the company said that sales may be sluggish for the remainder of the year as companies decrease spending on personal computers.

That bleak bit of news took down the big PC makers, such as Dell Computer, which dropped $3.19 a share to $47.75, and Compaq Computer Corp., which lost $1.38 a share to $26.13.

Internet-related companies took a beating as well.

The most notable loser was Exodus Communications Inc., manager of Internet sites, which dropped $25.19 a share to $82.50.

With Monday's losses, half the stocks listed on the Nasdaq are now down more than 50 percent.

"And there are plenty of others down 70 percent to 80 percent," said Mr. Skrainka.

Mr. Cordiak said that with those kinds of losses, many leading technology companies "with real earnings" should be getting close to a bottom and may offer buying opportunities.

"Technology is not going away, and companies will continue to spend on technology and the leaders will emerge," said Mr. Cordiak.

Decliners led advancers 12-to-5 on the Nasdaq.