Market Wrap: Labor Report Sends Stocks Tumbling - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
News

Market Wrap: Labor Report Sends Stocks Tumbling

The Dow Jones industrial average dove 180.78 points, or 1.6%, to 10,791.29. At one point in the afternoon, the average had fallen as much as 258 points. The Nasdaq Composite plunged 65.83 points, or 2.4%, to 2,640.01, while the Standard & Poor's 500 Index fell 1.8%.

The damage was sparked by the Labor Department's report that the second-quarter employment cost index rose 1.1%, significantly more than the expected 0.8% rise and the biggest gain since 1991's second quarter. The wages and salaries component of the report was up by a larger-than-expected 1.2%. The employment cost index is closely watched by Federal Reserve Chairman Alan Greenspan.

After yesterday's close, Compaq Computer (CPQ) posted a $184 million loss for the second quarter. The world's largest PC maker also said it will record a $700 million to $900 million restructuring charge in the third quarter to cover plant closings and the elimination of 6,000 to 8,000 employees. That would represent as many as 12% of Compaq's 68,000 full-time employees. Compaq's loss per share was 1 cent less than the mean analyst forecast. Its stock dropped 1-3/16 to 24-3/4

Other computer hardware stocks followed suit, with IBM (IBM) dropping 3 to 125-3/8; Hewlett-Packard (HWP), 3-5/16 to 106-5/8; Dell Computer (DELL), 1-1/2 to 41-1/4; and Sun Microsystems (SUNW), 2-7/16 to 68-5/16.

Software giant Microsoft (MSFT) fell 3-1/16 to 86-15/16. The federal government, having failed so far to settle its antitrust suit against Microsoft out of court, is attempting to break up the company, according to an article in USA Today. The stock of competitor Oracle (ORCL) rose 1/2 to 38-3/16.

The credit rating agency Duff & Phelps downgraded its ratings on the debt securities of Advanced Micro Devices (AMD) because of "continuing operating losses and the need for substantial additional capital expenditure before AMD realizes what could be large returns from its attractive new generation of microprocessors." Despite the downgrade, AMD's stock rose 11/16 to 17-1/2 today.

The stocks of ERP vendors and networking companies were all lower, in response to the overall drop in the markets. SAP (SAP) fell 1-3/8 to 32-3/8; PeopleSoft (PSFT), 9/16 to 13-15/16; Lucent (LU), 1-1/2 to 65-3/8; Nortel (NT), 1-1/8 to 88-1/4; and Cisco Systems (CSCO), 1-9/16 to 61-3/4.

Internet stocks, which are more volatile than most other securities, dropped sharply today, with Yahoo (YHOO) losing 6 to 137; Ebay (EBAY), 2-11/16 to 102-1/4; and America Online (AOL), 3-1/2 to 99-1/4.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Commentary
Enterprise Guide to Edge Computing
Cathleen Gagne, Managing Editor, InformationWeek,  10/15/2019
News
Rethinking IT: Tech Investments that Drive Business Growth
Jessica Davis, Senior Editor, Enterprise Apps,  10/3/2019
Slideshows
IT Careers: 12 Job Skills in Demand for 2020
Cynthia Harvey, Freelance Journalist, InformationWeek,  10/1/2019
Register for InformationWeek Newsletters
Video
Current Issue
Getting Started With Emerging Technologies
Looking to help your enterprise IT team ease the stress of putting new/emerging technologies such as AI, machine learning and IoT to work for their organizations? There are a few ways to get off on the right foot. In this report we share some expert advice on how to approach some of these seemingly daunting tech challenges.
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll