|
Nasdaq battles back
|
 |
August 31, 1999: 4:28 p.m. ET
Inflation fears and interest rate pressures not enough to sink techs
|
NEW YORK (CNNfn) - Inflationary and interest rate fears weren't enough to drag technology stocks lower at Tuesday's close in another lightly traded session.
The National Association of Purchasing Management index -- and its inflation indicator price component -- for August rose higher than expectations, sending tech investors through another round of inflation worries.
The report was originally supposed to be issued Wednesday but the August version was released prematurely, and its surprising figure added to the confusion among tech investors.
After the Federal Reserve's last interest rate hike, Wall Street believed it probably was not going to see another one this year.
However, comments by Alan Greenspan indicating he would take stock market performance into account, and also the NAPM figures, have the Street suddenly worried again that another increase may occur in 1999.
Interest rate fears normally tend to rattle technology shares more, since those firms use borrowing to start and expand their businesses.
Still, the effect on the technology benchmark Nasdaq composite index could have been worse. While the initial figures knocked it off its feet, it rebounded in late day trading and ended up 26.48 at 2739.17, according to preliminary data.
Over on the Dow Jones industrial average, the blue chip index was helped higher by two of its tech components. Hewlett-Packard (HWP) gained 2-9/16 to 105-3/8.
IBM (IBM) shares moved up 1-3/8 to 124-9/16 after Big Blue announced a new alliance with Cisco Systems. The deal, worth as much as $2 billion, has networking firm Cisco acquiring switching and routing property from IBM.
In return, Cisco will provide IBM's Global Services unit with joint networking and electronic commerce services. Cisco (CSCO) shares rose 1-1/16 to 67-13/16 Tuesday.
Tuesday marked a generally higher trading session for computer makers. Direct seller Gateway (GTW) gained 1-9/16 to 96-15/16 while Dell Computer (DELL) rose 2-1/2 to 48-13/16.
Apple Computer (AAPL) shares jumped 3-3/16 to 65-1/4 after the company raised the curtain on its new Power Macintosh, designed to speed handling of graphics and multimedia functions for the publishing market -- a key Apple customer group.
Helping the new PowerMac along will be Apple's new PowerPC chip, which eventually will run at a processing speed of 500 MHz, which would challenge Intel's Pentium for speed.
Shares of Sun Microsystems (SUNW) rolled 3-7/8 higher to 79-1/2 after the company unveiled StarPortal as part of its Web-based office applications system.
The StarPortal service will offer users word processing, spreadsheet and image presentation applications over the Web, in the hopes of stealing away market share from Microsoft Office, a popular suite of office programs.
Microsoft (MSFT) shares rose 5/16 to 92-9/16 after being under a bit of pressure earlier Tuesday, not only because of the Sun announcement, but also as investors responded to news of a security leak in its popular Hotmail Web-based e-mail service.
The security breach allowed anyone to access any of the 40 million Hotmail accounts without having to enter a password. Once in the account, anyone could send or read e-mails for that account. Microsoft shut the system down Monday and now says the flaw has been fixed.
On the Internet stock side, shares of eToys (ETYS) fell 2-3/16 to 43-1/2 after the company announced it would launch a United Kingdom-based toy retailing Web site as part of an overall initiative to move into European e-commerce.
Toys 'R' Us (TOY), which already has U.K. operations, lost 5/16 to 13-13/16 Tuesday.
Online phone service provider Net2Phone (NTOP) shares leapt 12-3/8 after AT&T reached an agreement with Net2Phone to provide networking services. The deal will allow Net2Phone to expand into 17 countries and the company expects it to boost revenue by more than $100 million over the next five years.
AT&T (T) shares lost 1 to 45.
|
|
|
|
|
 |
|
