NEW YORK (CNN/Money) -
Tech stocks fell Wednesday on gloomy corporate reports and grim international news, with profit-taking in all sectors.
The Nasdaq composite index lost 42.99 points, or 2.1 percent, to close at 1,989.54. The AMEX Technology index fell 1.9 percent while the Philadelphia Semiconductor Index closed down 1.3 percent.
Shares in Nortel Networks (NT: down $1.59 to $4.05, Research, Estimates) tumbled 28 percent after the company fired its CEO and two other top executives amid a widening investigation into the company's accounting practices.
The telecom equipment manufacturer also delayed the release of first-quarter figures and forecast a 50 percent drop in 2003 earnings.
Nortel was the New York Stock Exchange's most actively traded issue and weighed on the telecom manufacturing and networking sectors. Another company on Wednesday's NYSE high-volume list Lucent (LU: down $0.16 to $3.45, Research, Estimates), a Nortel rival, lost 4.4 percent to $3.45.
Computer network provider Cisco Systems (CSCO: down $0.50 to $22.37, Research, Estimates) dropped 2.5 percent to $22.37. The company announced Wednesday it would team up with Sweden's Ericsson to jointly sell equipment to Internet-based, global phone companies.
Shares in mobile phone manufacturer Ericsson (ERICY: down $1.00 to $27.46, Research, Estimates) ended the day down 3.7 percent at $27.46.
Other NYSE volume leaders in the sector included Micron Technology Inc. and Network Associates, which both plummeted in active trade.
Micron Technology (MU: down $1.00 to $14.28, Research, Estimates) fell 6.5 percent after Smith Barney Citigroup downgraded the chipmaker's stock from buy on analyst fears that the company's chip output could increase and push down prices.
The downgrade dragged on the sector, with major semiconductors reporting losses including Advanced Micro Devices (AMD: down $0.42 to $15.17, Research, Estimates) trading down 2.7 percent and Applied Materials (AMAT: down $0.30 to $18.94, Research, Estimates) losing 1.7 percent.
Chip gear maker KLA-Tencor (KLAC: down $1.10 to $43.32, Research, Estimates) lost 2.5 percent and chipmaker PMC Sierra (PMCS: down $0.60 to $13.62, Research, Estimates) plummeted 4.4 percent.
Semiconductor company and mobile phone maker Motorola, which reported stellar earnings and pushed techs up last week, fell 3.5 percent to $19.60 in active NYSE trade.
Network Associates (NET: down $2.12 to $15.98, Research, Estimates), another NYSE volume leader, shed 11.7 percent to $15.98. The maker of security software Tuesday predicted second-quarter results that fell far short of expectations, with analysts bracing themselves for more negative surprises. Shares have stayed down on the news.
Siemens AG (SI: down $4.02 to $73.20, Research, Estimates) dove 5.2 percent after the mobile phone maker and electrical engineering conglomerate announced a $352 million charge because of problems with its Combino tram unit that would make it miss its full-year earnings goals by more than 10 percent.
The company also announced Thursday it would suspend operations in Iraq because of security concerns.
Comcast (CMCSA: up $0.20 to $30.20, Research, Estimates) pulled its $48 billion bid forWalt Disney, and shares in the cable operator edged up 0.77% percent on the news to $30.20.
Comcast announced an interest in buying bankrupt rival Adelphia and reported first-quarter revenue rose 9.8 percent from a year earlier to $4.91 billion, still short of Wall Street expectations. Merrill Lynch upgraded the company's stock to buy from neutral.
Nasdaq volume leader Microsoft Corp. (MSFT: down $0.60 to $26.56, Research, Estimates) fell 2.4 percent to $26.56. Intel Corp. (INTC: down $0.50 to $26.35, Research, Estimates) lost 1.9 percent and ended the day at $26.35
Of the many companies that reported earnings Wednesday, telecommunications company Telephone and Data Systems Inc. (TDS: down $1.09 to $66.16, Research, Estimates) and its subsidiary U.S. Cellular (USM: down $0.41 to $35.45, Research, Estimates) both posted solid first-quarter results. TDS said its revenue grew 7 percent from a year earlier, but the stock still dropped 1.6 percent.
U.S. Cellular reported first-quarter profit versus a year-ago loss, adding an unexpected 196,000 customers, but still ended the day down 1.1 percent.
The Chicago-based telecom posted a profit of $9.2 million, or 11 cents a share, versus a loss of $27.8 million, or 32 cents per share, a year earlier, and revenue rose 10 percent.
Legg Mason analyst Craig Mallitz forecast that U.S. Cellular's costs would rise as rules that allow customers to keep their numbers while switching service providers take effect in May.
JDS Uniphase Corp. (JDSU: down $0.10 to $3.86, Research, Estimates) announced that quarterly losses narrowed sharply from a year earlier, on increased market demand. The company ended the day down 4.2 percent despite the positive good news.
The San Jose, Calif.-based communications equipment maker posted a net loss of $7.3 million, or 1 cent a share, compared with a net loss of $136.8 million, or 10 cents a share, a year earlier. Excluding one-time items, the company reported a loss of $6.7 million, or break-even per share, meeting analysts' expectations, according to First Call.
Macromedia Inc. (MACR: down $0.50 to $18.21, Research, Estimates) was one the few shares to rise on a positive quarterly earnings announcement. Shares dropped 3.1 percent during active trade, but rose more than 18 percent on earnings the software company posted after the bell.
Macromedia reported a higher quarterly profit on increased sales of its Web design software and new products.
Earnings reports are due Thursday from Cox Communications, (COX: down $0.19 to $31.35, Research, Estimates) IDX Systems, (IDX: Research, Estimates) Helix Technology Corp., Gateway Inc. and Electronic Arts Inc. (ERTS: down $0.30 to $50.81, Research, Estimates)
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