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Techs take a drubbing
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February 17, 1999: 5:08 p.m. ET
Revenue woes at Dell, HP drag Nasdaq, as AT&T-TCI clear a regulatory hurdle
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NEW YORK (CNNfn) - Tech sector companies took another drubbing on Wall Street Wednesday, in the aftermath of a heap of earnings reports that raised the specter of a rough ride ahead.
The tech-heavy Nasdaq Composite plummeted 64.96 points to 2,248.91, increasing its loss over the last three days to more than 155 points amid fear about the tech sector's high valuations.
Dell's bell finally gets rung
Further lopping off what had been the good feeling about the sector was the direct vendor of PC's Dell Computer (DELL), which sank 7-3/16 to 81-9/16, with more than 112 million shares trading hands.
That marked the third-heaviest one-day volume for a stock on the Nasdaq, behind Oracle's (ORCL) 172 million share in late 1997, and 152 million shares in 1996 of Comparator, which has since been delisted.
Late Tuesday, Dell reported revenue growth that didn't meet stringent Wall Street analysts' targets for its fourth quarter but still met analyst estimates for fourth-quarter earnings.
The stock got battered as analysts began to decipher what kind of competitive threat Dell faces from other PC vendors that are applying the direct-selling model Dell first championed.
"Dell cited IBM as the competitor that has been the most aggressive right now," said Paul Klee, a fund manager at John Hancock Mutual Funds.
Soundview Financial Group cut its rating on Dell to "buy" from "strong buy" Wednesday. But A.G. Edwards raised its rating to "accumulate" from "maintain."
Other PC makers take a hit
For its part, Dow member IBM (IBM) dropped 2-1/4 to 170-1/4 after its Lotus unit put off the shipping date of the next release of its Notes collaboration software to the end of March from a prior deadline of late February.
And fellow PC maker Hewlett-Packard (HWP) slipped 2-1/4 to 68-1/4 after it aired concerns about future revenue growth, despite beating the analysts' earnings targets by 9 cents per share in its first quarter.
Meanwhile, Gateway (GTW) lost 13/16 to 67-3/16, Apple Computer (AAPL) shed 1-5/16 to 37, and Compaq Computer (CPQ) fell 1-7/8 to 40-15/16.
Among the titans of software, Microsoft (MSFT) fell 6-1/4 to 150, Oracle (ORCL) shed 2-3/16 to 51-1/4 and Sun Microsystems (SUNW) dropped 6-3/8 to 94-1/16.
Networking company 3Com (COMS) edged out a modest gain, up 5/16 to 32-3/16 after announcing an deal with BellSouth (BLS) by which the Southeast phone company will offer high-speed Internet services on its lines.
BellSouth, which gained 4-7/16 Tuesday ahead of the announcement, slipped 4 to 45-1/2.
Elsewhere in telecom, Dow member AT&T (T) and Telecommunications Inc. (TCOMA) said that their shareholders have approved the long-awaited merger of the companies.
The Federal Communications Commission later announced that it had approved the deal. Shares of AT&T edged down 5/16 to 84-5/16; TCI added 13/16 to 64-5/16.
Internet stocks keep relative cool
The wild swings among Internet stocks were mostly absent Wednesday, although the sector was generally under pressure.
The tumble was led by Internet service provider EarthLink Network (ELNK), off 8-7/8 to 58-3/8 after it reported late Tuesday a quarterly operating loss that was narrower than analysts expected.
Elsewhere, Internet domain-name registrar Network Solutions (NSOL) tumbled 17-5/8 to 140, Amazon.com (AMZN) lost 5-1/8 to 93-1/2 and Yahoo! (YHOO) dropped 3-3/4 to 129-5/8. 
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