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Dell worries rough up techs
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February 12, 1999: 5:04 p.m. ET
Broker concerns hurt direct-PC vendor; earnings woes hit software makers hard
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NEW YORK (CNNfn) - The technology sector suffered a setback Friday, as one of its premier players fell victim to crystal-ball gazing by analysts that hinted of a dip in sales ahead.
The tech-heavy Nasdaq Composite erased nearly all of its stellar 96-point gain Thursday - a record one-day point gain for the index - and fell 83.66 points, or 3.5 percent, to 2,231.89 Friday.
Mike Clark, the head of U.S. equity trading for CS First Boston, said the high valuations of stocks in the sector may finally be hitting home for investors.
"It's a red flag that's being waved in front of people's faces," he said. "This is a commodity market, this is no longer an equity market. The [tech sector] should be the marquis sector - as the tech sector goes, so goes the market."
Dell worries ring investors' bells
The giant direct PC vendor Dell Computer (DELL) tumbled 12 to 89-7/8 after a pair of Wall Street analysts commented that sales may take a hit as its top competitors start to apply some of the same tactics Dell is famous for.
A BancBoston Robertson Stephens analyst said Dell may see sales figures ease back from their steamy pace as its rivals such as Compaq Computer begin to apply a direct-sales model.
Meanwhile, an analyst for Salomon Smith Barney said such competition could lead to a shrinkage in average PC prices.
Dell has made a name for itself for beating analysts' targets -- and now some analysts say it may post fourth-quarter earnings next Tuesday that simply meet the estimate.
The worries about Dell didn't translate into gains in the share prices for its rivals however. After solid performances Thursday, Compaq (CPQ) shed 1-7/8 to 42-15/16, IBM (IBM) fell 5-3/4 to 172-3/4, and Gateway (GTW) slipped 5-3/4 to 70-1/4.
Earnings woes rattle tech players
J.D. Edwards (JDEC) tumbled 3-7/8 to 15, after the maker of enterprise-resource planning software said late Thursday that it would come up short of Wall Street analysts' targets as top customers focus on the year-2000 glitch.
BT Alex. Brown, CS First Boston, and Prudential Securities downgraded the stock on Friday.
Among other software players taking a hit: bellwether issue Microsoft (MSFT) dropped 5 to 157-3/4, Oracle (ORCL) dipped 2-7/8 to 56-11/16, and Sun Microsystems (SUNW) fell 4-7/8 to 100-7/16.
Earnings woes also struck at World Access (WAXS), which sank 3-5/16 to 8-3/16 after the maker of telecommunications equipment posted profit before one-time items 7 cents lower than what the company predicted just last month.
BT Alex. Brown, Interstate/Johnson Lane, Prudential Securities and Robinson Humphrey all downgraded the stock Friday.
Chip makers too take their licks
It was a rocky road for microprocessor makers, a day when industry bellwether Intel (INTC) announced it would officially unveil its next-generation Pentium III chip on Feb. 26.
An Intel spokeswoman told Reuters that pricing hasn't yet been determined for the Pentium III, which will initially offer speeds of 450 to 500 MHz. She said Intel expects the chip to be its mainstream product by the end of 1999.
Shares of Intel fell 6-3/4 to 126-1/2.
Meanwhile, rival Advanced Micro Devices (AMD), the maker of chips for low-cost PCs that has been hit hard by Intel's entry to that market segment, edged up 3/8 to 17-9/16.
Also lower were Micron Technology (MU) off 4-5/16 to 45-1/2, Xilinx (XLNX) down 5 to 77-1/8, and Linear Technologies (LLTC) shedding 3-1/2 to 101. 
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