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CNNfn tech stock report
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August 26, 1998: 6:28 p.m. ET
Applied Materials, Intel part of general downturn in sector
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NEW YORK (CNNfn) - Trouble in the networking sector and Russia's economy made it tough to profit from techs Wednesday.
The Nasdaq Composite ended down 30.04, to 1768.13, on volume of almost 520 million shares. Declining issues beat out advancers by more than a 3-to-1 margin.
Leading the downturn was Fore Systems Inc. (FORE), which dropped 5-3/8, to 18-7/8. The nation's seventh-largest networking equipment maker agreed to purchase privately held Berkeley Networks Inc. in a $250 million cash and stock deal.
Fore will take a charge of between $1.80 and $2.20 a share in its second fiscal quarter, which ends Sept. 30.
Also, SoundView Financial cut its short-term rating on the Fore to "hold."
Shares of Applied Materials Inc. (AMAT) helped weigh down the chip equipment sector. Applied shares fell 1-7/8, to 29-9/16, after the semiconductor equipment maker said it was cutting 2,000 jobs, or 15 percent of its work force, citing weakness in Asia and other regions.
Applied said it will take an unspecified charge that would lead to a loss in its fiscal fourth quarter, ending Oct. 25.
That news weighed on the shares of its competitors, sending Novellus Systems Inc. (NVLS) down 2, to 32-1/4 and KLA-Tencor Corp. (KLAC) down 15/16, to 28-3/16.
Adobe Systems Inc. (ADBE) gained 3-1/16, to 27-5/8, after competing desktop software maker Quark Inc. made an unsolicited offer to acquire the company. After Adobe continued to rebuff Quark's overtures, Quark went public about its desire to buy the competitor late Tuesday. Quark is privately held.
Dell Computer Corp. (DELL) turned in a strong day, rising 4-5/8, to 128-5/8, on news it will offer more financing options to its international customers. Dell is also opening a manufacturing and customer support center in Brazil to service customers in South America.
News was mixed among Dell competitors, with Gateway Inc. (GTW) falling 1-1/2, to 58-3/8, and IBM Corp. (IBM) rising 2-7/16, to 130-7/8.
Shares of computer chip giant Intel Corp. (INTC) dropped 1-13/32, to 83. Intel executives recently told federal antitrust investigators it dropped a software product for microprocessors in 1995 out of pressure from software giant Microsoft Corp. (MSFT). Microsoft shares ended down 1/4, to 112-9/16.
Internet stocks finished largely lower, led by Amazon.com Inc. (AMZN), which dropped 4-3/8, to 127-1/4. Yahoo! Inc. (YHOO) dropped 5/8, to 96-7/8, and search engine designer Inktomi Corp. (INKT) lost 5/8,, to 74-7/8.
Russia's economic troubles cast a shadow on telecommunications companies that do business in the region. Vimple Communications (VIP) dropped 4-9/16, to 15-7/16, and Russian long distance giant OAO Rostelcom (ROS) fell 13/16, to 4-5/8.
Virginia-based Global TeleSystems (GSTG) lost 6-7/8, to 33-5/8. The Virginia-based company provides telecommunications services to many customers throughout Russia and Eastern Europe.
--by staff writers Cyrus Afzali and Brendan Hasenstab
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