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Techs fall but don't crash
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April 12, 1999: 10:55 a.m. ET
Compaq tumbles after profit warning, sparking selling in tech sector
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NEW YORK (CNNfn) - Tech stocks sank Monday on worries about first-quarter profits after Compaq issued an earnings warning after Friday's closing bell.
Compaq's warning that profit would be half of what analysts had forecast echoed through financial markets though Wall Street avoided the broader sell-off that some investors had feared.
In early trading, the Dow Jones industrial average fell 40 points to 10,134 and the Nasdaq composite index, weighted with tech issues, lost 31 points to 2,562 in early trading. But both were well off their earlier lows.
Investors rushed to sell on worries that a slowdown at Compaq (CPQ), the world's biggest personal computer maker, pointed to weakness in the entire tech sector, which led the broader market higher for much of 1998 and was starting to resume its leadership in Wall Street's recent march to record highs.
While several big Wall Street brokers cut their ratings on Compaq, some industry analysts said the problems facing the Houston-based computer maker were company-specific and would not necessarily hurt the industry at large.
Compaq tumbled 6-15/16 to 24, a drop of 22.4 percent. Other computer makers also fell though not nearly as hard. Dell Computer (DELL) shed 2-5/8 to 40-15/16, Gateway 2000 (GTW) lost 3-3/4 to 69, Apple Computer (AAPL) lost 1-1/4 to 35-1/2 and Sun Microsystems (SUNW) fell 2-3/16 to 68-1/16.
The two big tech stocks in the Dow, IBM and Hewlett Packard, put in a mixed performance, with IBM (IBM) off 3-15/16 to 182-3/8, a 2.1 percent decline, while Hewlett Packard (HWP) was unchanged at 69-5/8.
Among semiconductor makers, Intel (INTC), the world's biggest chip maker, lost 3-5/16 to 62-1/16, Texas Instruments (TXN) fell 3-3/4 to 106-7/8 and Advanced Micro Devices (AMD) edged down 5/16 to 15-5/16.
In the software sector, Microsoft (MSFT) dropped 1-21/32 to 92-19/32, Oracle (ORCL) lost ¼ to 25-5/8, Computer Associates (CA) slipped 13/16 to 35-1/8 and Novell (NOVL) dipped ½ to 24-3/8.
Internet stocks also fell. Yahoo! (YHOO) sank 5-1/16 to 201-15/16, America Online (AOL) declined 2-9/16 to 157-3/8 but Amazon.com (AMZN) slipped just 3/8 to 182-1/2.
Network equipment maker Cisco Systems (CSCO) fell 2-1/8 to 116 and 3 Com (COMS) lost 5/8 to 21-5/8.
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