Big Blue Paces Tech Stock Drop
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The Dow and S&P 500 were little changed on Wednesday, but that was small comfort for technology investors, who must have felt like they were suddenly the epicenter of the financial crisis.
IBM (NYSE: IBM), one of the tech sector's strongest names this year until recently, fell nearly 6% on concern that the stronger U.S. dollar will hurt earnings when the company reports its quarterly results in two weeks. It was Big Blue's biggest drop in three years.
The tech-heavy Nasdaq was down 1.1%, led lower by Apple (NASDAQ: AAPL), Juniper Networks (NASDAQ: JNPR), eBay (NASDAQ: EBAY) and Ericsson (NASDAQ: ERIC), while AMD (NYSE: AMD) fell 10% on the NYSE.
Ericsson lost 7% on a Goldman Sachs downgrade. The analyst firm also upgraded Alcatel Lucent (NYSE: ALU) on valuation, sending that stock 4% higher.
Nuance (NASDAQ: NUAN) soared 15% after raising guidance.
Micron (NYSE: MU) rose 6% ahead of its results then gave back half those gains after the close after reporting a widening loss.
The broader market started the day out with steep losses on news of a big drop in manufacturing last month, then rebounded on hopes that the U.S. Senate will pass a bailout package tonight and send it on to the House for a re-vote after Monday's surprising defeat.
Also helping blue chips was an investment in GE (NYSE: GE) by Warren Buffett and reports that the SEC could bring back the "uptick" rule, Depression-era restrictions on shorting that the SEC lifted in July 2007, right before the financial crisis hit.
The Nasdaq lost 22 to 2069, the S&P slipped 5 to 1161, and the Dow shed 19 to 10,831. Volume declined to 5.84 billion shares on the NYSE, and 1.95 billion on the Nasdaq. Decliners led by a few shares on the NYSE, and by an 18-10 margin on the Nasdaq. Upside volume was 54% on the NYSE, and 25% on the Nasdaq. New highs-new lows were 17-260 on the NYSE, and 7-191 on the Nasdaq.