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Tech stocks troubled again
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October 8, 1998: 12:02 p.m. ET
Internet, software companies continue to feel the pain in early trade
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NEW YORK (CNNfn) - Technology stocks took another beating in early Thursday trading as shares of Internet and software companies continued their week-long slide.
Web portal leader Yahoo Inc. (YHOO) plunged 9-3/8 to 105 in late-morning trade, despite reporting strong third-quarter earnings and user traffic.
Keith Benjamin, an analyst at BancBoston Robertson Stephens, said some investors believe Yahoo's positive report means the end of good news in the Internet sector for a while.
"Historically we've seen Yahoo lead the other stocks up, followed by the perception that there isn't any better news coming among the other stocks," he said. "Also, their [third-quarter] numbers were monstrous, but if you look forward they're guiding us to retrain our outlook. They may be trying to be rationally conservative, but it's probably more market driven."
Yahoo's early slide carried over to the rest of the Internet sector, including its Web-portal rivals. Excite Inc. (XCIT) dipped 3-7/16 to 30-1/2, while Infoseek Corp. (SEEK) fell 2-13/32 to 18-3/32. Lycos Inc. (LCOS) dropped 1-3/4 to 25-3/8.
Also feeling the pain Thursday were online service provider America Online Inc. (AOL), which fell 5-5/16 to 86-11/16, and e-commerce giant Amazon.com Inc. (AMZN), which tumbled 8-3/16 to 85-1/4.
In the software sector, Microsoft Corp. (MSFT) dropped 4-1/8 to 90.
BMC Software Inc. (BMCS), which fell 9-1/16 on Monday, continued its slide in early Thursday trade, shedding 3-5/8 to 38-3/8. Citrix Systems Inc. (CTXS) lost 5 to 50-1/4, while Intuit Inc. (INTU) fell 3-3/4 to 36-1/2.
John Puricelli, an analyst at A.G. Edwards, said software companies are still caught in the fallout of analysts downgrades of key providers to the enterprise market.
"It was triggered by Goldman Sachs and Morgan Stanley downgrading SAP and PeopleSoft (PSFT), and now people are reevaluating the need for software," he said. "The big software companies were perceived as being able to do no wrong. Now they can do no right." 
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