Dell's Decline Leads Tech Stock Dip
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Federal Reserve Chairman Ben Bernanke gave the market a boost with Thursday's hints at a possible interest rate cut. But the enthusiasm didn't last as today's big mid-day gains in the Dow Jones Industrial Average were more modest by close. Bernanke's comments couldn't help the mood in the tech sector as the Nasdaq ended the week on a down note, thanks in large part to a bad day for Dell.
At one point today, the Dow climbed 150 points, but closed the day up 60 points (to 13,372) after it was dragged down by the technology-heavy Nasdaq, which fell 7.17 points (to 2,661). The S&P gained 11.57 points to close to 1,481.
While Bernanke's encouraging words caused the market to start the day off with happy thoughts, the reality of Dell earnings was a sobering factor, pushing the PC maker's stock down $3.60 to $24.54. Yesterday Dell reported that its third-quarter sales rose to $15.65 billion, a 9 percent jumped over the same quarter last year. However, while it beat $15.34 billion estimates, pro forma earnings of 35 cents a share only met Wall Street estimates, raising pricing concerns.
Also among today's technology losers were Google, IBM and Brocade. The search giant's stock fell $4 to $693. The company announced it intends to bid in the government's 700MHz spectrum auction in January. Big Blue fell to 105.18, a 2.16 percent decline. Brocode dropped 5.81 percent to close at $7.29.
But the news wasn't all bad for tech stocks. Among advancers were Motorola. The mobile phone maker gained more than 2 percent to close at $15.97 on news today that CEO Ed Zander plans to step down at year's end to be replaced by Chief Operating Officer Greg Brown. Analysts and some shareholders had been calling for Zander's resignation for months as the company's financial performance and stock price continued to deteriorate.
Also closing on the plus side were Internet bellwethers Yahoo and Amazon.com. Yahoo ended at $26.81, up 16 points. And Amazon closed up almost 1.6 percent to end the session at $90.56.