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Nets roll, but Compaq warns
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April 9, 1999: 5:13 p.m. ET
Nasdaq coasts to another record, but ills loom as Compaq warns on earnings
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NEW YORK (CNNfn) - The eye-popping wizardry of Internet stocks entranced investors again Friday, while behind-the-scenes a major PC maker was preparing to drop a bombshell.
In what could set the tech sector ablaze Monday, Compaq Computer (CPQ) after the bell issued an earnings warning. In trading Friday, its shares added 1-5/16 to 30-15/16.
Compaq said its first-quarter profit would come at about 15 cents per share, far below the 31 cents per share that analysts polled by First Call Corp. had expected.
The company, whose stock has dipped as earnings fears about the sector have mounted in recent months, cited weaker-than-expected PC demand and increased price pressures.
Among other personal-computer makers, Dell Computer (DELL) tumbled 1-7/16 to 43-9/16. Dow component IBM (IBM) fell 3 to 184.
Elsewhere in the hardware arena, chip-equipment giant Applied Materials (AMAT) edged up 1-3/8 to 66-1/2 after unveiling new products for making copper chips.
Vitesse Semiconductor (VTSS) slipped 6-5/8 to 51 even though the chip maker posted earnings of 22 cents a share in its latest quarter -- a penny above expectations. The drop came even though CS First Boston raised its 12-month price target on the stock to $70.
Westell Technologies (WSTL) rose 1-1/2 to 7-1/4, after the telecom-equipment maker said Bell Atlantic (BEL) has extended a deal to let the regional phone giant supply products for high speed Internet access.
Elsewhere in telecom, taking an upward ride for a second day was MGC Communications (MCGX), tacking on 8-1/2 to 46, after the telephone company announced it would re-invent itself as a high-speed data service provider.
The Nasdaq Composite rose 19.66 points to close at a record 2,593.05 Friday.
Surprise! Net IPOs blast off
Bolting onto the Wall Street playing field Friday were yet more Internet-related initial public offerings.
I-Turf (TURF) soared 161 percent to 57-7/16 after shares of the web community site service, which targets teens and young adults, priced at $22 apiece, at the top of the expected range.
BT Alex. Brown was the lead underwriter.
Rival theglobe.com (TGLO) exploded up 19-15/16 to 78-15/16, after announcing late Thursday a 2-for-1 stock split.
And USInternetworking (USIX) rocketed up to 57-1/2, up 174, percent, after it priced shares at $21 -- far above the expected range. CS First Boston led the $126 million deal, for the supplier of enterprise software via the Internet.
Speaking of enterprise software, several of that segment's top players, along with security software makers, staged a tiny comeback after concerns about earnings hit early in the week.
At least one analyst said the sell-off was overdone. A culprit was Network Associates (NETA), which bounced back 1-9/16 to 16-5/16, and database management software titan Oracle (ORCL) revived, up 2-9/16 to 25-7/8.
And elsewhere in the software arena, Intuit (INTU) shed 4-3/16 to 106-1/16, after CS First Boston downgraded the personal finance software maker to "buy" from "strong buy."
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