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Techs end week on uptick
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January 7, 2000: 6:05 p.m. ET
Despite earnings warnings, Friday rally helps erase earlier losses
By Staff Writer Richard Richtmyer
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NEW YORK (CNNfn) - Technology issues capped off a wild and tumultuous week on an uptick Friday, as an afternoon rally helped to wipe away some of the sector’s recent losses.
The buying continued unabated throughout most of the day, despite an after-hours earnings warning from Lucent Technologies on Thursday, and an employment report that showed job growth and wages accelerated at a faster-than-expected pace in December.
Lucent (LU), which ended composite trading Thursday at 69, ended Friday’s session at 54. More than 179 million shares changed hands during the session, more than 14.5 times Lucent’s average trading volume.
The company, a Wall Street darling since its split from AT&T three years ago, said after the bell Thursday that it would miss analysts’ fiscal first-quarter forecasts because of changes in customer buying patterns.
Lucent’s warning was one of several negative pre-announcements among technology companies this week. Computer maker Gateway (GTW) and online software vendor Beyond.com (BYND) also warned investors of shortfalls.
While investors punished those stocks on Thursday, they both ticked up Friday. Gateway ended the session up 2-5/8 at 61-5/8, while Beyond.com added 15/32 to 7.
Most other tech stocks advanced as well, including Lucent’s rivals in the telecom-equipment market.
Shares of Cisco Systems (CSCO) added 5-7/8 to 105-7/8. Ericsson (ERICY) ticked up 4-7/16 to 60-15/16. Alcatel (ALA) advanced 2-1/4 to 44. And Nortel Networks (NT) edged up 20-7/16 to 97-7/16.
"The market is perceiving this as something that is totally specific to Lucent, it is not a factor for the rest of the telecommunications marketplace,” Jonathan Cohen, technology analyst at Wit Capital told CNNfn. "More to the point, it is not a factor at all for the rest of the technology space.”
Some market observers also expect Lucent to quickly recover from the stumble.
Bob Wilkes, a telecommunications analyst at Brown Brothers Harriman, said Lucent’s trouble appears to be limited to the current quarter.
"They have laid out a scenario where they will be showing better results as we go through the balance of the year, particularly in the second half, and they’ve indicated that demand for their fiber-optic product in particular remains strong. It was an execution issue in the latest quarter,” Wilkes said.
Moving ahead, Wilkes said he thinks Lucent is in a position to either meet or even exceed analysts’ expectations in the remainder of 2000 [95K WAV of 95K AIFF].
The rest of the technology sector surged on Friday, helping the Nasdaq composite index post its biggest ever one-day point gain.
The Nasdaq, which had plunged nearly 10 percent between Tuesday and Thursday, ended Friday’s session up 155.49 at 3882.62, leaving it down 6 percent from Monday’s high of 4,131.15.
Dot-coms make a strong comeback
Internet stocks, which took some of the hardest knocks in the recent market skid, bounced back the highest. The Dow Jones composite Internet index regained 25.68, or 7 percent, to 389.93.
Shares of Internet incubator CMGI (CMGI) added 24-3/4 to 275. Online retailing giant Amazon.com (AMZN) picked up 4 to 69-9/16. America Online (AOL) advanced 4-1/8 to 72-7/8.
Web portal Yahoo! (YHOO) gained 39-1/16 to 407-1/4. Internet domain name registrar Network Solutions (NSOL) added 4-13/16 to 202-3/4.
Shares of RealNetworks (RNWK) added 18-7/8 to 132-1/16 after the company announced several distribution and marketing alliances.
On the dot-com downside, online auctioneer eBay (EBAY) finished off 3-1/8 at 131-3/4. Internet service provider Mindspring (MSPG) shed 7/8 to 26. And eToys (ETYS) ticked down 1-15/16 to close at 21-9/16.
Equipment makers finish mixed
Computer-equipment manufacturers ended Friday’s session mixed. The Goldman Sachs computer hardware index ended the day up 7.92 at 499.28, a 1.6 percent rise on the day.
On the upside, Apple Computer (APPL) added 4-1/2 to 99-1/2. Hewlett-Packard (HWP) edged up 2-7/8 to 103-7/8. Sun Microsystems (SUNW) advanced 3-7/8 to 71-7/8. And Micron Electronics (MUEI) ticked up ¾ to close at 11-1/8.
Equipment makers who were left out of Friday’s rally included IBM (IBM), which edged down ½ at 113-1/2; Silicon Graphics (SGI), which lost 1/8 to 9-1/4; and Unisys (UIS), off ½ at 28-11/16.
Shares of Dell Computer (DELL) ticked down 1-13/16 to 46-3/8 amid market speculation that the company was preparing to issue an earnings warning for its fourth quarter, which it will complete at the end of this month.
Executives at Dell would not comment in the rumors and said that its fourth-quarter guidance has not changed.
Earlier in the week, a Merrill Lynch analyst issued a report saying that Dell was having difficulty managing its business amid high component costs, which could weigh on the company’s fiscal fourth-quarter operating results.
Analog companies lead chip segment
Chip makers also bounced back strongly on Friday, sending the Philadelphia Stock Exchange’s semiconductor index up 21.42 to 690.75, a 3.2 percent rise on the day.
Shares of Intel (INTC) added 3-1/4 to 82. Meanwhile, Intel rival Advanced Micro Devices (AMD) ticked up ½ to 32-1/2.
Manufacturers of analog semiconductors, which are used to convert real-world signals such as images and sound into a digital format that computers and other electronics devices can understand, posted stronger gains.
Linear Technology (LLTC) added 4-1/4 to 82. Sipex (SIPX) gained 1-3/16 to 18-7/8. Anadigics (ANAD) advanced 3-15/16 to 47-7/16. Analog Devices (ADI) ticked up 2-3/8 to 86-7/8.
Losers among chip makers included: Micrel (MCRL), off 5/8 at 54-3/8; Cirrus Logic (CRUS), which edged down ½ to 12-1/16; Microchip Technology, off 1-5/8 at 60-1/4; and Vitesse (VTSS), down 3-5/16 at 46. 
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