RealTime IT News

Sun Sets On Stocks

A massive accounting charge sent shares of Sun Microsystems plunging 14% on Tuesday.

The $1.05 billion non-cash charge is to increase a valuation allowance for the company's net deferred tax assets - in short, a sign that the company isn't confident of its ability to generate taxable income in the future.

Analysts lined up to downgrade Sun on the news, saying Sun's struggles reflect a move toward Linux and possible gains by IBM , and said Sun may need to cut even more jobs to get back to profitability.

The broader was battered by much weaker than expected consumer confidence and Chicago manufacturing reports and more turmoil in international currency markets.

The Nasdaq fell 37 to 1786, the S&P 500 dropped 10 to 995, and the Dow lost 105 to 9275. Volume rose to 1.51 billion shares on the NYSE, and 1.88 billion on the Nasdaq. Decliners led by a few shares on the NYSE, and by 19-12 on the Nasdaq. Downside volume was 67% on the NYSE, and 79% on the Nasdaq. New highs-new lows were 95-12 on the NYSE, and 83-12 on the Nasdaq.

Rambus rose 7% on hopes for a positive FTC ruling.

Enterasys plunged 30% on a warning.

AOL edged higher on strong broadband sales.

Ultimate Software climbed 4.6% on an upgrade.

Microsoft , down 3.6%, launched a new operating system targeted at the digital TV market.

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