Tech Stocks Fall on Financing Fears
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Tech stocks tumbled Monday on concern that the credit market crisis is beginning to hit technology financing deals.
A Wall Street Journal article said technology financing defaults are on the rise and as a result, firms that finance technology purchases are tightening lending terms. That has forced companies like IBM (NYSE: IBM), Cisco (NASDAQ: CSCO) and Oracle (NASDAQ: ORCL) to finance more deals themselves, potentially taking on additional risk in the process.
It was the latest sign of just how widespread the credit market crisis has become. U.S. stocks fell about 3% Monday, following an overseas sell-off that saw Japan's Nikkei fall 6% to a 26-year-low, wiping out all its gains since 2003.
Wireless, telecom and networking stocks were among the few sectors doing well, led by strong wireless results from Verizon (NYSE: VZ), which saw its shares jump 10%.
Embarq (NYSE: EQ) added 2% on a takeover offer from CenturyTel (NYSE: CTL), while Juniper (NASDAQ: JNPR) edged higher on an Oppenheimer upgrade.
Other tech gainers included Dell (NASDAQ: DELL), Broadcom (NASDAQ: BRCM), Comcast (NASDAQ: CMCSA), Nvidia (NASDAQ: NVDA), Texas Instruments (NYSE: TXN), Motorola (NYSE: MOT) and Amazon (NASDAQ: AMZN).
Vimpel (NYSE: VPL) jumped 19% after buying a stake in a Russian handset retailer.
The Nasdaq fell 46 to 1505, the S&P lost 27 to 848, and the Dow slumped 203 to 8175. Volume declined to 5.61 billion shares on the NYSE, and 2.27 billion on the Nasdaq. Decliners led by a 27-7 margin on the NYSE, and 22-6 on the Nasdaq. Downside volume was 88% on the NYSE, and 77% on the Nasdaq. New highs-new lows were 8-728 on the NYSE, and 1-601 on the Nasdaq.