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RealTime IT News

Wire-to-Wire Rout Sinks Stocks

It was a bell-to-bell rout on Wall Street Friday as continued economic concerns and IBM's disappointing earnings results fueled a selloff that left major U.S. stock indexes at their lowest point of the year.

The Dow Jones, Nasdaq and S&P 500 started trading in the red and finished even redder, despite positive earnings news from General Electric and Citigroup.

While the tech-heavy Nasdaq took the biggest percentile hit on Friday -- dropping 39 points, or 2.0 percent, to 1,908 -- the Dow Jones caused the biggest buzz among traders by posting its third consecutive triple-digit loss. The industrial index ended trading down 191 points, or 1.9 percent, to 10088. The S&P 500 fell 19 points, or 1.7 percent, to 1143.

IBM shares on Friday plunged 6.94, or 8.3 percent, to 76.70 after announcing late Thursday first-quarter earnings that were below analysts' estimates. Big Blue's Q1 net income was $1.4 billion, or 85 cents per share, up from 79 cents per share in Q1 2004. But analysts expected net income of 90 cents per share. IBM's revenue of $22.9 billion also fell short of Q1 projections calling for $23.7 billion in sales.

Another tech heavyweight, server maker Sun Microsystems , dropped 30 cents, or 7.6 percent, to 3.66 after reporting third-quarter revenue of $2.625 billion, slightly below last year's $2.65 billion Q3 revenue.

Hewlett-Packard tumbled 91 cents, or 4.2 percent, to 20.84. The computer maker's stock may have been adversely affected by research reports released Friday concluding that the global PC market was soft in the first quarter of this year.

Even the winners were stingily rewarded by investors Friday. Citigroup gained a scant 35 cents, or 0.8 percent, to finish at 45.75. The financial giant announced before trading that its net income had climbed 3 percent to a record $5.44 billion.

And General Electric inched up 25 cents, or 0.7 percent, to 35.75 after posting a 25 percent increase in first-quarter profit over last year's Q1. The multi-industry conglomerate reported net income of $4.04 billion, or 38 cents per share, compared to $3.24 billion in Q1 2004.

In economic news, the surge in crude-oil prices pushed overall import prices up 1.8 percent, according to the Labor Department. It was the biggest one-month hike in more than two years.