RealTime IT News

Stocks Fall Despite Economic Growth

Stocks retreated from a seven-week rally Tuesday as investors appeared to engage in profit-taking prior to the Thankgiving holiday trading break.

The Nasdaq tumbled 37.5 or 2.5%, to 1444.4, while the Dow Jones fell 173, or 1.96%, to 8676.4. The S&P 500 dropped 19.6, or 2.1%, to 913.3.

Traders responded to positive economic news Tuesday with a sell-off, as stocks began the day down and never recovered, despite a U.S. Commerce Department report that showed third-quarter gross domestic product had risen at a 4% annual rate, exceeding earlier estimates of a 3.1% climb.

Among tech stocks, mobile software vendor Openwave Systems soared 38 cents, or 16.5%, to 2.69, OPWV's sixth consecutive day of gains. The company's shares have skyrocketed 216% since Oct. 22, when Openwave announced declining losses in its fiscal first quarter.

Wireless network services provider Wireless Facilities climbed 9.3% to 6.93. Since closing at 4.05 on Oct. 9, WFII has gained 71%. Earlier this month WFII reported Q3 net income of 4 cents per share, compared to a net loss of 6 cents per share in the year-ago quarter.

Most of the major tech companies lost ground on Wall Street Tuesday, perhaps in response to warnings from Tech Data Corp. -- the No. 2 wholesaler of computer products -- that spending has been weakening in November.

Networking equipment giant Cisco Systems fell 2.96%, or 44 cents, to 14.45. Since closing at 15.24 last Thursday -- its highest close since August -- CSCO stock is down 5.5%.

Software maker Microsoft dipped 1.33, or 2.3%, to 56.90. Redmond announced Tuesday a plan to ease licensing conditions for smaller companies as a way to compete against Linux and other open-source software.

Business software vendor Computer Associates lost 26 cents, or 1.7%, to 14.72. The company this week has been fighting allegations of revenue-booking improprieties. Several former employees are suing CA, and the federal government is investigating company accounting practices.

Name-your-price etailer priceline.com lost 3 cents, or 1.6%, to 1.88. On Nov. 6, PCLN shares plunged 27% in one day to 1.69 after the company said it would lay off 15% of its staff.