Ericsson, Chip Stocks Lead Market Lower
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Shares of Ericsson (NASDAQ: ERIC) tumbled more than 10% Friday on weak mobile phone sales from its joint venture with Sony (NYSE: SNE).
News that Sony Ericsson's sales and quarterly loss will come in far below estimates also shaved 3% off the price of Sony shares.
But Palm (NASDAQ: PALM) managed a modest gain despite a big sales drop, as traders placed bets that the company's forthcoming Pre smartphone could spark a turnaround.
Chip stocks were sharply lower, with Texas Instruments (NYSE: TXN), AMD (NYSE: AMD), Applied Materials (NASDAQ: AMAT), Lam Research (NASDAQ: LRCX), KLA-Tencor (NASDAQ: KLAC), Micron (NYSE: MU) and Nvidia (NASDAQ: NVDA) among the sector's weaker names. News of a decline in chip equipment orders last month contributed to the sell-off.
Sun Microsystems (NASDAQ: JAVA) lost 6% after the Wall Street Journal reported that IBM (NYSE: IBM) is conducting lengthy due diligence as part of its bid to acquire the company.
3Com (NASDAQ: COMS) slipped on its results, while Expedia (NASDAQ: EXPE) gained on a Citi upgrade.
The Nasdaq lost 26 to 1457, the S&P 500 fell 15 to 768, and the Dow lost 122 to 7278. Volume declined to 8.49 billion shares on the NYSE, but rose to 2.52 billion on the Nasdaq. Decliners led by a 27-9 margin on the NYSE, and 18-8 on the Nasdaq. Downside volume was 79% on the NYSE, and 84% on the Nasdaq. New highs-new lows were 3-40 on the NYSE, and 7-39 on the Nasdaq.