Technology stocks took a beating for the second time in a week, even though tech companies continued to report better-than-expected second-quarter earnings.
The Dow Jones industrial average declined 33.56 points, or 0.3%, to 10,969.22. The technology-laden Nasdaq Composite, however, dove 77.32 points, or 2.8%, to 2,684.45
Virtually every benchmark computer-related issue declined. Microsoft (MSFT) lost 3 5/8 to 91 1/16; IBM (IBM), 4 11/16 to 124 5/16; Sun Microsystems (SUNW), 3 1/2 to 67 3/16; Hewlett-Packard (HWP), 7 7/16 to 105 1/8; Oracle (ORCL), 1 7/8 to 36 1/4; Lucent Technologies (LU), 1 7/8 to 68 1/4; EMC (EMC), 3 1/8 to 60 3/16; and Cisco Systems (CSCO), 1 15/16 to 61 1/8.
Supply-chain software vendor i2 Technologies (ITWO) plunged 10 11/32, more than 24%, to 32 1/8 after Prudential Securities cut its rating on the stock to "hold" from "accumulate." Yesterday, i2 announced second-quarter revenue of $131.4 million, a 57% increase from the same period last year. Net income in the second quarter of 1999 was $8.5 million, or 11 cents per share, compared with $600,000, or 1 cent per share, in the second quarter of 1998. Both periods included acquisition-related charges.
Another big loser was Compuware (CPWR), which was cut to "buy" from "strong buy" by both CS First Boston and SG Cowen today. Its stock declined 6 7/8 to 26 3/4. The developer of productivity-enhancing systems yesterday reported record first-quarter revenues of $443.1 million, an increase of 30.8% from $338.6 million during the same quarter last year. Income from operations grew 64.2% to $135.9 million from $82.8 million in the first quarter of the previous fiscal year. Peter Karmanos Jr., the company's chairman and CEO, said the latest results "continue to support a 35% to 40% growth estimate for fiscal year 2000."
Internet book retailer Amazon.com (AMZN) plunged 18 7/16 to 107 as investors expressed concerns about the company's aggressive spending plans for its Web sites. After markets closed Wednesday, Seattle-based Amazon.com reported a pro forma net loss of $82.8 million, or 51 cents per share, compared with a pro forma net loss of $17 million, or 12 cents, a year before. Sales nearly tripled to $314.4 million.
One of the only winners among technology stocks today was Legato Systems (LGTO), which rose 4 5/16 to 78 7/8. The enterprise storage-management company yesterday announced record second-quarter revenue of $62 million, an increase of 65% over last year's second quarter. Net income, excluding merger-related costs, increased 242% to $12.5 million, from $3.7 million in the same fiscal period of 1998.
5 Top Federal Initiatives For 2015As InformationWeek Government readers were busy firming up their fiscal year 2015 budgets, we asked them to rate more than 30 IT initiatives in terms of importance and current leadership focus. No surprise, among more than 30 options, security is No. 1. After that, things get less predictable.