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Techs trip as market dips
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May 14, 1999: 5:17 p.m. ET
New hints of inflation chip away at tech stocks, IBM loses steam, Oracle rises
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NEW YORK (CNNfn) - A unexpected jump in inflation took a bite out of stocks on Friday and the technology sector didn't escape the sour market mood.
A larger-than-expected increase in inflation spooked investors overall. Technology issues, which often take the first blows when concerns of rising interest rates appear, took their licks.
Microsoft (MSFT) fell 2-1/4 to 76-7/8, Dell Computer (DELL) lost 2-1/16 to 41-3/16, and chip bellwether Intel (INTC) shed 2-1/16 to 58.
Pulling back from soaring gains Thursday, amid optimism about the Internet by its top executive, IBM (IBM) fell 6-15/16 to 239-11/16.
Coming out of an analysts' meeting on Thursday with no bad news to announce apparently eased investor concerns about the database software giant Oracle (ORCL), up 7/8 to 23-7/8, coming a day after an analyst downgrade deflated the stock 10 percent.
That raised concerns Oracle would pre-announce an earnings warning. Analysts said the company expressed caution about coming months but did not explicitly warn its earnings wouldn't meet targets.
Some upsides come in telecom
One highlight sector was telecom, with analysts rushed to praise some equipment makers.
Adtran (ADTN) climbed 4-1/4 to 25-1/2 after Soundview Technology raised the shares to a "buy" from "hold" with digital transmission poised to benefit from increasing demand for high speed access. Hambrecht & Quist also opened its coverage with a "buy" rating.
And Advanced Fibre Communications (AFCI) tacked on 1-3/16 to 9-15/32 after Soundview began coverage with "buy" rating, crediting a good management team at the maker of advanced communication systems.
Also getting an upgrade boost was Primus Telecommunications (PRTL), up 1-15/16 to 17-9/16 after Morgan Stanley Dean Witter raised the stock to "strong buy" from "underperform"
Morgan also increased its 12-month price target to $27 from $21.
Pacific Gateway Exchange (PGEX) climbed 5-15/16 to 42-7/8 after the international long distance service provider reported earnings of 22 cents per share late Thursday, a penny shy of targets but revenue increased 34-percent from a year ago.
But Lehman Brothers cut its 99 earnings per share estimates to 87 cents from $1.14 as the company boosts spending to diversity product lines.
Net IPOs still roll
On the initial public offering front, the latest in eye-popping Internet stocks fell on Wall Street with a bang.
The Net-based consumer credit provider NextCard (NXCD) rose to 33-1/2, up 68 percent, after pricing 6 million shares of stock at $20 each.
Also moving higher was Scient (SCNT), up to 32-5/8, or 63 percent after pricing 3 million shares at $20, higher than the revised $17-$19 range, for the Internet technology consultant.
Morgan Stanley Dean Witter led the deal.
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