RealTime IT News

Nets, Techs Have Investors Singing The Blues

Investors fled shares of Internet and technology companies on Thursday for the relative safety of blue chips, as earnings worries continued to plague New Economy stocks.

Amazon.com and VerticalNet dropped sharply despite beating earnings estimates, and earnings warnings from Nokia and WorldCom rocked shares of telecom companies.

The ISDEX fell 39 to 732. The Nasdaq lost 145 to 3842, in the process closing below its 200-day moving average. The S&P 500 slipped 2 to 1449 after rising as much as 12 points in the first hour of trading. The Dow bucked the trend, rising 69 to 10,586. Volume declined slightly to 1.15 billion shares on the NYSE, but rose to 1.77 billion on the Nasdaq. Decliners led by 14 to 13 on the NYSE and a whopping 28 to 11 on the Nasdaq. Only three ISDEX stocks traded higher. The second-quarter Employment Cost Index came in in line with estimates at a 1% gain, but Durable Orders for June came in at the highest level in 9 years. Second-quarter GDP will be released tomorrow. For earnings reports, visit our earnings calendar and reported earnings.

Amazon.com fell 4 11/16 to 31 3/8, the lowest level since December 1998, after reporting a second-quarter loss of 33 cents a share, 2 cents better than estimates. But revenues came in at $578 million, below estimates of $585 million. Analysts lined up to downgrade the stock, including the analyst most associated with the stock, Merrill Lynch's Henry Blodget. He downgraded the stock from near-term Buy to near-term accumulate. For more on Amazon's earnings, click here.

InfoSpace announced that it is buying profitable Go2Net for 1.82 shares for each share of GNET. InfoSpace also announced a second-quarter loss of 1 cent per share, a nickel better than estimates. Investors voiced their disapproval, sending shares of Go2Net lower by 1/8 to 60 7/16, and punishing InfoSpace, down 13 17/64 to 34 15/32.

VeriSign reported earnings of 7 cents a share, 9 cents better than estimates. But the stock fell 3 15/16 to 175 1/4.

VerticalNet reported earnings of 23 cents a share, 7 cents ahead of estimates. But the stock fell 8 3/4 to 48. Lehman Brothers reiterated Buy, but lowered its price target from $175 to $105 and raised its fiscal 2000 loss estimate by 8 cents to minus 84 cents.

JDS Uniphase reported earnings of 14 cents a share, 2 cents better than expected. The stock, which was added to the S&P 500 last night, dropped 6 59/64 to 129, back below its recent breakout point of 130-131. Sands Brothers lowered the stock from Buy to Neutral based on the earnings report and the stock's recent run-up.

WebMethods beat estimates by 3 cents with a 16-cent loss. But the stock fell 17 11/32 to 115 25/32. NBC Internet reported a loss of 81 cents, 4 cents better than forecasts. The stock lost 1 33/64 to 10.

Looksmart reported a second-quarter loss of 9 cents a share, 5 cents better than estimates, but the stock lost 59/64 to 20 1/8. Covad beat estimates by 13 cents with an 86-cent loss, and the stock lost 5/16 to 17 3/8 after trading as high as 19 15/16.

Software.com fell 13 11/32 to 106 9/32 despite beating estimates by 8 cents with 8-cent earnings. MicroStrategy missed by a penny with a loss of 54 cents. The stock dropped 6 3/8 to 23 5/8.

EarthLink beat estimates by 7 cents with a 29-cent loss, yet declined 1 11/64 to 13 1/2. Women.com reported in line with estimates at a 20-cent loss, and declined 1/2 to 3 13/16.