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CNNfn market movers
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July 22, 1998: 2:43 p.m. ET
Computer Associates sinks as a rival gains; Net stocks still among big movers
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NEW YORK (CNNfn) - A sharp warning about earnings from a key software company was the buzz of Wall Street Wednesday as earnings season plodded ahead with more of a grumble.
Computer Associates International (CA) plummeted 17-13/16, or more than 31 percent, to 39-3/16 after the software maker reported fiscal third-quarter earnings that beat analysts' expectations, but said Asia's economic turmoil and customer purchasing delays due the so-called "Year-2000" computer glitch may damage future earnings.
Top investment banks rushed to lower their ratings on Computer Associates' shares after the announcement, including Donaldson, Lufkin & Jenrette, Merrill Lynch and Morgan Stanley Dean Witter.
Meanwhile, CompuWare (CPWR) rose 6 to 59-7/8. At least two analysts raised ratings on the stock after the software company reported earnings late Tuesday that beat consensus analyst targets. A Warburg Dillon Read analyst recommended investors switch out of CA stock into CompuWare's.
Coca-Cola Enterprises (CCE) lost 4-1/8 to 34-7/8 after the soft drink bottler and spin-off of Coca-Cola (KO) posted weaker-than-expected earnings in its second quarter and unveiled a $5 billion capital spending program.
DuPont (DD) lost 2-3/8 to 64-1/4 after the chemical giant fell short of analyst consensus earnings estimates amid weakness in its polyester and crop protection businesses and the effect of lower oil prices on its Conoco unit.
Advanced Digital Information (ADIC) sank 4-1/8 to 10-3/8 after the maker of data storage equipment warned new products will not meet goals for the third quarter, causing revenues and earnings to fall short of analyst expectations.
Cendant (CD) fell 1-1/16 to 16-7/16 after a Wednesday report said Ernst & Young, which audited the marketing and consumer services provider, said it had been misled by the company and distanced itself from Cendant's accounting-related woes.
Liz Claiborne (LIZ) lost 9-1/8 -- or about 18 percent -- to 41-5/8 after the women's clothier met analyst earnings expectations of 47 cents a share in the second quarter but said it expects more modest gains in sales and earnings in the second half of the year.
Dow component United Technologies (UTX) ascended like its Otis elevator unit, up 2-13/16 to 97-1/16, after reporting second quarter earnings of $1.44 a share, beating analyst expectations by 6 cents despite Asia's economic troubles.
Paring earlier losses Wednesday, Lucent Technologies (LU) was off 3/16 to 101-15/16 on the heels of two days of strong gains after the telecommunications equipment maker said third-quarter profits beat analyst estimates for operating earnings by 5 cents a share.
Rival communications equipment makers Northern Telecom (NT) fell 1-3/8 to 59-15/16 and Cisco Systems (CSCO) was up 1/4 at 99-3/16 after falling earlier.
Investors hardened to PeopleSoft (PSFT), off 4-1/16 to 42-3/16 after the developer of enterprise application software beat analyst estimates for the second quarter by a penny a share but warned it may take a buyout-related charge in the third quarter. PeopleSoft also said it will seek new partners and acquisitions.
Rival Oracle (ORCL) fell 1-11/16 to 26-1/16.
Dow member Hewlett Packard (HWP) was down to 56-1/16 Wednesday after closing at 61-13/16 Tuesday, before the PC maker said fiscal third-quarter earnings could fall short of analysts' already-lowered forecasts due to Asia's woes.
Rival IBM (IBM) fell 1-5/8 to 126-1/2 after strong gains Tuesday following a better-than-expected earnings report. In heavy trading the direct PC vendor Dell Computer (DELL) lost 2-1/8 to 108-3/4.
Walt Disney (DIS) fell 13/16 to 36-7/8 after reporting Tuesday a dip in fiscal third-quarter income due to weak performances in its home video and movie businesses.
Mixed picture for 'Net stocks
After a slow start, Amazon.com (AMZN) picked up speed Wednesday afternoon, rising 3-7/16 to 135-1/2 but off its highs as the Internet-based bookseller prepares to report on its second-quarter earnings. The consensus analyst estimate, as reported by First Call, is for Amazon.com to post a loss of 44 cents a share.
In a display of how unforgiving Wall Street can be, E*Trade (EGRP) lost 2-3/4 to 29-1/4 even though the Internet broker reported fiscal third-quarter earnings soared 114 percent. E*Trade said, however, it may just break even or report a loss next year to pay for a stepped-up marketing campaign.
AmeriTrade Holding (AMTD) gained 3-1/8 to 40-1/8 after reporting better-than-expected earnings and stronger volume growth than rival E*Trade in its fiscal third quarter. America Online (AOL) said Wednesday it has inked a marketing pact with AmeriTrade worth a reported $25 million.
Mindspring Enterprises (MSPG) again sprang forward, rising 9-13/16 to 136-7/16, after the Internet service provider, rumored as a possible buyout target, prepares to release second-quarter earnings after the bell Wednesday. The consensus analyst forecast, according to First Call, is for 18 cents a share.
Oakwood Homes (OH) got blown down 8-15/16 to 22-1/16 -- or 29 percent -- after the manufactured housing maker said delinquency rate increases and higher loan prepayments hurt fiscal third-quarter earnings to 10 cents a share from 48 cents a share a year ago.
Aavid Thermal Technologies (AATT) got burned Wednesday, losing 15-1/2 to 14-1/2 -- or more than 51 percent -- after the maker of heat-protection products said its third-quarter earnings will fall due to a shift in product demand. DLJ downgraded the stock.
Qualcomm (QCOM) gained 7-1/4 to 64-13/16 after the wireless communications service provider blew past analyst earnings targets for its fiscal third quarter by seven cents a share, reporting 33 cents a share.
Linear Technology (LLTC) sank 6-5/8 to 59-1/2 but was off early lows after the analog chip maker warned after the close Tuesday its fiscal first-quarter earnings will be as much as 15 percent lower than the fourth quarter of fiscal 1998 due to lower customer demand.
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