Posted at 11:45 a.m., Monday, June 18, 2001
Selloff sends Nasdaq below 2,000
Associated Press
NEW YORK — Wall Street punished technology stocks for a seventh straight session today on fears the sector's worst days are still ahead. The selloff sent the Nasdaq composite index to its first close below 2,000 since April.
The pessimism spread to the broader market, limiting the modest gains achieved by a handful of manufacturing and retail stocks. Even better-than-expected results from Oracle after the market closed weren't expected to cheer weary investors.
"This is a complete abdication of anything having to do with technology and the overlapping market can't deal with this unrelenting selling," said Larry Wachtel, market analyst at Prudential Securities. "Nortel, JDS Uniphase ... all the heroes of yesteryear are being decimated because people are worried about when their earnings are going to improve."
The Nasdaq composite index closed down 39.79 at 1,988.64, according to preliminary calculations, its worst finish since April 16, when the index closed at 1,909.57.
The Dow Jones industrial average managed a small advance, thanks to gains in a handful of non-tech issues, rising 21.74 to 10,645.38, its first advance since last Tuesday.
The broader Standard & Poor's 500 index fell 5.93 to 1,208.43.
Technology was again a focus of investors, who have shied away from the sector on concerns that its performance won't recover until 2002.
Although second-quarter earnings were expected to be horrible, Wall Street has had a hard time adjusting to the spate of corporate earnings warnings that have been appearing recently.
Specifically, investors have been unnerved by reports of excess inventory and continued sluggish orders — both of which suggest the economy and business climate remain weak.
Oracle fell 16 cents to $14.84 in regular trading before rebounding to $15.20 in the extended session on results that beat expectations by a penny. Still, analysts were doubtful that the report would do much to improve the market's mood since the software maker had previously reduced its estimates citing the economy.
Nortel Networks fell $1.33 to $8.53 on selling related to its earnings warning last week.
Other big tech losers included Microsoft, down $1.14 at $66.88. JDS Uniphase was down $1.84 at $10.60, while Lucent dropped 62 cents to $5.69.
Blue chips fared better, getting boosts from Wal-Mart, up 37 cents at $48.52, and General Motors, which rose $2.16 to $61.51.
The market has been pulling back since mid-May, a reflection of growing doubts that the business climate is improving. A string of earnings warnings and disappointing economic news have left investors lukewarm about stocks and unwilling to make large commitments.
The Federal Reserve, which has cut interest rates five times so far this year, is scheduled to meet next week and possibly lower rates yet again.
