Taiwan fears chip at techs
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October 1, 1999: 4:20 p.m. ET
Hewlett-Packard falls on sales warning; Dell shrugs off analyst downgrade
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NEW YORK (CNNfn) - Technology shares came under pressure Friday amid continued worries over chip supplies out of Taiwan, sending shares of a bellwether PC stock tumbling.
The Nasdaq composite index lost 9.30 points to close at 2736.86, according to preliminary results. The Nasdaq had fallen as low as 2698.01 before staging a late-day rally.
Despite the recent inconsistency in tech stocks' performance, analysts and money managers continue to express optimism in anticipation of strong quarterly earnings results.
"I think [technology is] an area that will continue to grow," said John Davidson, chief investment officer, Orbitex Group of Funds. "It's where we're getting the increased productivity, where we're getting the growth, where the service economy is really providing good value from the U.S."
Such optimism couldn't shake worries off the PC sector, however. Dow component Hewlett-Packard Co. (HWP) fell 3-9/16 to 87-3/16 after Carly Fiorina, the company's chief executive officer, told analysts that HP's fourth-quarter sales would come in at the low end of the forecast range. Fiorina attributed the shortfall to shipment delays in PC components due to the earthquake in Taiwan.
Dell Computer Corp. (DELL) inched up 23/32 to 42-17/32. The firm was able to shrug off BancBoston Robertson Stephens' downgrade of its stock to "long-term attractive" from "buy." BancBoston analyst Dan Niles noted that Dell's revenue growth is likely to be weaker than expected in part because of the situation in Taiwan.
Chips shares themselves, however, staged a solid recovery as investors went bargain hunting for stocks that had been severely dragged down Thursday.
Broadcom Corp. (BRCM) rose 3-1/2 to 112-1/2, Lam Research (LRCX) added 3-13/16 to 64-13/16 and Maxim Integrated (MXIM) finished 3-29/32 higher at 67.
In the Internet sphere, shares of Excite@Home Corp. (ATHM) continued to make waves, rising 3-3/16 to 44-5/8. After Thursday's market close, AT&T Corp. (T), which owns a 58-percent stake in Excite@Home, said it continued to explore alternatives regarding its ownership stake in the firm.
Rumors that AT&T wants to split the Excite portal from the @Home cable-based Internet service sent the company's shares higher earlier in the week. The New York Times reported Friday, however, that Excite@Home's board canceled a meeting set for Monday to vote on such a split because Cox Communications (COX), one of the firm's biggest shareholders, threatened to veto the plan.
AT&T shares fell 1-7/8 to 41-5/8; Cox shares rose 15/16 to 42-11/16.
Also involved in the fray is America Online Inc. (AOL), which has been rumored to be the potential acquirer of Excite. AOL shares rose 3-7/8 to 107-15/16.
Finally, Sun Microsystems Inc. (SUNW) slipped 1 to 92. The Wall Street Journal reported that the firm plans to release the source code of its Solaris operating system to the public in an effort to emulate the success of Linux.
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