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Wall St. struggles with losses
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February 17, 1999: 11:36 a.m. ET
Stocks move off their lows, but concerns over tech growth persist
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NEW YORK (CNNfn) - Technology stocks moved off their lows and so did the rest of Wall Street at midday Wednesday, even as the market remained under pressure from what investors saw as a conflict between high stock prices and slowing revenue growth in the high-tech sector.
Strong but disappointing results from industry heavyweights Dell Computer and Hewlett Packard, reported late Tuesday, helped push the rest of the high-tech corner and the broader market into the red, while bargain hunters helped reduce the losses.
Shortly before 11:30 a.m. ET, the technology-laden Nasdaq Composite was down 23.61 points, or 1.1 percent, at 2,290.26.
Losses were more limited for the Dow Jones industrial average, which traded 9.33 points lower at 9,287.70. Declines beat advances 1,536 to 1, 094 as trading volume on the New York Stock Exchange stood at 236 million shares. The S&P 500 index fell 1.98 to 1,239.89. (Click here for a look at today's CNNfn market movers)
Bonds recovered from an early-morning slump caused by profit taking after Tuesday's strong gains. The market bounced back, helped by the declines in stocks and data showing industrial production remained virtually unchanged in January. The benchmark 30-year Treasury bond rose 7/32 of a point in price for a yield of 5.33 percent.
The dollar remained strong against the Japanese yen, following its soaring gains Tuesday. The greenback eased against the euro.
Dell unsettles the techs
In stocks, what started Tuesday night with an after-hours meltdown in the shares of Dell Computer (DELL) continued in the morning as investors showed their disappointment with the company's slowing fourth-quarter revenue growth.
Although Dell reported earnings in line with expectations, and its revenue jumped 38 percent from the same quarter a year earlier, the sales numbers came sharply below expectations and 38 percent was well below the 52 percent revenue growth the company averaged in the previous three quarters.
Taking the news as a signal that the company's days of rocket-speed growth may be coming to an end, investors brought Dell's stock down 7-3/4 to 81, making it the most active issue and the biggest net loser on the Nasdaq. Dell had fallen as low as 75-1/2 in after-hours trading Tuesday. The company also announced a 2-for-1 stock split, its seventh in as many years.
Fellow high-tech blue chip Hewlett Packard (HWP), which Tuesday reported earnings that beat expectations but meager revenue growth in the fiscal first quarter, also saw its stock skid. The Dow component lost 1-3/8 to 69-1/8.
Investors were far more generous with the stock of chip-equipment maker Applied Materials (AMAT), the third major high-tech to deliver its latest results Tuesday night. Although the company's operating profit of 11 cents a share was sharply below the 52 cents a share earned in the same quarter a year earlier, it was almost double the 6 cents Wall Street expected. As a result, Applied Materials' shares shot 2-5/8 higher to 70-1/2.
Other big-name techs were mostly lower. Dow member IBM (IBM) fell 1/8 to 172-3/8, Microsoft (MSFT) lost 4-7/16 to 151-13/16, and Cisco Systems (CSCO) shed 2-11/16 to 96-3/8. Dell competitor Gateway (GTW) inched up 1/4 to 68-1/4 but rival Compaq (CPQ) was down 1-1/16 to 41-3/4. Intel (INTC) inched up 1/8 to 126-1/2 as Applied Materials' surprisingly strong earnings led some investors to believe the semiconductor industry could be on the way to a steady recovery.
In the day's other news, shares of medical-equipment maker Medtronic (MDT) tumbled 4-11/16 to 76-5/16 after the company said sales at its newly-acquired Arterial Vascular Engineering unit fell below expectations in the fiscal third quarter. 
-- by staff writer Malina Poshtova Zang
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