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Tech Stocks Slip While Wall Street Stabilizes

The leveling off occurred as the federal government announced that it would spend $250 billion to buy bank stock.
The Dow Jones industrial average close down just half a percent Tuesday after the largest one-day point rally on Monday, but the Nasdaq closed down 3.54%.

The tech-rich Nasdaq Composite closed down 5.34%, or 65.24 points, at 1,779.01, with many tech stocks losing value after the composite remained in the red for most of the day.

The Dow, on the other hand, had another whipsaw day with a 700-point spread to close at 9,310.99, down 76 points, for a mild loss of 0.82%.

Tuesday marked another session when financial headlines were out of date within an hour. After hopes rose along with the Dow by midday Tuesday, stocks slipped into negative territory just before 2 p.m., then began to rise to come off the day's lows the last hour.

Overall, the day offered some hope of relative stability since it was the first in nine days that the Dow did not close with a triple-digit point loss or gain.

The leveling off occurred as the federal government announced that it would spend $250 billion to buy bank stock.

Some experts said the volatility could continue, since October options expire Friday, consumer spending is likely to slow, and earnings reports loom ahead. Still, many investors seemed happy to recoup some of their losses and hold their positions after Monday's big rally as evidenced by slower sales.

Tech stocks decreased again as Gartner trimmed tech spending projections for 2009. The company said it expects tech spending to grow just 2.3%, instead of the 5.8% it had originally predicted. Adding to the bad news, Gartner forecast that most growth would occur in emerging markets, while the United States experiences little or no growth and tech spending decreases in Europe.

Apple was rumored to announce a laptop under $1,000, then offered one at $999.99. Its stocks fell by 5.6% to close at $104.08. Microsoft closed down 5.49% at $24.10. Google was down 4.81% to close at $362.71. Research In Motion, the maker of BlackBerrys, was down 5.87% to close at $60.12.

Yahoo, Amazon.com, and eBay also fell, while IBM closed up 1.51% at $93.60.

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Sara Peters, Editor-in-Chief, InformationWeek / Network Computing
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John Edwards, Technology Journalist & Author
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