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Techs in tame mood
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July 15, 1999: 4:47 p.m. ET
Technology shares mellow out but still help boost Nasdaq to new record
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NEW YORK (CNNfn) - It was a tame day for technology stocks Thursday, but it was still enough for the Nasdaq to set its 26th record of 1999.
The Nasdaq Composite nudged up its record showing Thursday, rising 21.18 to 2,839.31, according to preliminary data. It was an up-and-down day for the technology bellwether, which took a small dive in mid-morning before settling into a narrow range for the rest of the trading day.
Technology investors seemed to take little note of the May consumer price index figures, released before markets opened Thursday.
The figures showed the CPI unchanged for the month, while Wall Street had predicted a slight rise for the inflation indicator.
Normally, such news would have been good for technology investors, since it signaled a lesser chance the Federal Reserve would need to raise rates to tame inflation. Tech firms rely heavily on borrowing to expand their businesses and are particularly sensitive to such hikes.
Ironically, with inflation seemingly under control, the technology companies who are so skittish about inflation can take some credit for keeping it under control, according to Patricia Chadwick, director of U.S. equities at Invesco.
"I think technology is what's really driving the growth in our economy, the growth in productivity," she said. Technology advances have helped companies improve productivity, which allows companies to make more products with the same amount of workers, allowing them to keep prices down.
Intel active
Shares of semiconductor leader Intel (INTC) were active Thursday, falling 5/16 to 67-11/16. During the trading day, the company announced it was entering into a joint venture with networking firm Cisco Systems to develop high-speed modems, zeroing on residential and small business customers who are increasingly interested in such fast access.
The move shows further interest at Intel in expanding beyond its core chip business into other areas. It comes on the heels of a Wednesday announcement that it will restructure some of its operations to focus more on Internet opportunities. Cisco (CSCO) shares edged 1-1/4 higher to 66-9/16 after the news.
Telecom equipment maker Lucent was busy announcing its own joint ventures Thursday. It announced it would team up with Qualcomm to develop technology that would pinpoint emergency 911 wireless calls to 100 feet or less.
Additionally, Lucent announced it would buy fiber optic cable maker SpecTran Corp. for about $64 million in cash. Lucent (LU) shares jumped 2-11/16 to 77-11/16 while Qualcomm (QCOM) gained 3-13/32 to 152-31/32.
Apple investors engaged in a bit of profit taking as they had their first chance to respond to the company's positive earnings report. Apple (AAPL) stock fell 2-11/16 to 53-1/4.
The computer maker doubled its net profit from the same period one year ago and topped Wall Street estimates for the quarter. Growing sales of the company's popular iMac computer, introduced in January, helped push the earnings higher.
Apple also announced it was undertaking a $500 million stock buyback plan, which is about 5 percent of its shares outstanding.
On the software side, shares of Internet software company Inktomi (INKT) dropped 4-1/2 to 124-3/8 as investors retreated from the stock in the wake of its earnings report.
After markets closed Wednesday, Inktomi reported a 10 cent per share loss although First Call estimates predicted a 12 cent per share loss.
Computer systems and services firm Unisys (UIS) saw its stock rise 3/8 to 44-7/16 after the company issued its second quarter earnings results Thursday.
Unisys' net income rose 58 percent from the same period one year ago and beat the First Call consensus of analysts' estimates as well.
Among the widely held technology stocks, computer makers had a generally lower day. Dow components IBM (IBM) fell 15/16 to 136-5/16 but Hewlett-Packard (HWP) gained 4-13/16 to 113-1/4.
Compaq (CPQ) lost 1/8 to 27-7/8, and Gateway (GTW) lost 1-1/4 to 72. Over on the Nasdaq, Dell Computer (DELL) was up 15/32 to 43-31/32.
Among the Net stocks, online retailer Amazon.com (AMZN) emerged a clear winner after making several moves during the week to expand its product offerings to customers. Its stock leapt 4-9/16 to 139-9/16 Thursday.
Internet advertising firm DoubleClick (DCLK) had a strong day after announcing a merger with NetGravity earlier in the week, gaining 6-13/16 to 101-7/8.
Internet access provider Earthlink (ELNK) retreated, falling 3-7/8 to 60-1/8 after announcing late Wednesday that it lost 21 cents per share in the second quarter, 1 cent per share less than Wall Street estimates.
America Online (AOL) followed it lower, losing 2-1/4 to 120-3/4 Thursday while Mindspring (MSPG) shed 2-1/2 to 47. Online service Prodigy (PRGY) finished unchanged at 27-5/16.
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