RealTime IT News

Stocks Drop On Earnings Jitters

Stocks fell across the board Wednesday after high-profile earnings warnings from Computer Associates and other technology companies. Chip stocks were big losers after an analyst said their economic cycle may be peaking.

The ISDEX fell 21 to 730, just above its low for the day. The Nasdaq dropped 128 to 3863, the S&P 500 fell 23 to 1445 and the Dow declined 75 to 10,483. But volume declined from last week to 972 million shares on the NYSE and 1.3 billion on the Nasdaq. Breadth was even on the NYSE, but decliners led 24 to 16 on the Nasdaq. June employment data will be released on Friday, and Yahoo will kick off earnings season July 11. Ariba will follow on July 12.

Entrust Technologies lost more than half its value, plummeting 40 59/64 to 36 3/16. The company warned that second quarter earnings will be two cents a share, well under the eight cents analysts were expecting. The company attributed the shortfall to delays in closing public-key infrastructure (PKI) sales. Merrill Lynch, Goldman Sachs, DLJ and Sands Brothers all downgraded Entrust. Merrill said the company's top five customers account for about 40% of sales. VeriSign , off 16 1/2 to 166 7/8, RSA Security , down 5 3/8 to 68 7/8, Baltimore Technologies , off 2 3/16 to 14 5/16, and ISS Group , down 2 15/16 to 97, fell in sympathy. H.C. Wainwright reiterated a Buy on RSA and said it sees no weakness in the company's PKI licensing.

Exodus Communications fell 3 1/4 to 40 3/4 after Merrill Lynch removed the company from its top 10 list. Ariba , off 1 15/16 to 96 15/16, was added to Merrill's list. ABN Amro reiterated Buy ratings on Ariba, which has been struggling at its cycle high of 99 1/2, and Commerce One , off 5/8 to 43 7/8. i2 Technologies fell 2 to 101 despite a Wit SoundView Strong Buy. Wit said recent weakness in the stock was a buying opportunity, and said it expects a strong quarter.

BroadVision gained 2 1/2 to 54 9/16 after IDC ranked the firm the top e-commerce software applications company.

Internet Capital Group fell 1 45/64 to 33 11/32 despite Merrill Lynch reiterating near-term Accumulate and long-term Buy ratings on the stock. Merrill said the company's financial picture is beginning to clear, and that the stock may be at a good entry point.

Accrue Software fell 3 7/16 to 32 1/2 despite being named the top pick for the third quarter at Adams, Harkness and Hill.

OneSource Information Services gained 1 17/32 to 8 29/32 after preannouncing second quarter earnings of a three-cent loss to breakeven, much better than estimates for a 16-cent loss.

InterNAP Network lost 3/8 to 41 9/16 after NorthPoint Communications said it will use the company's facilities for corporate DSL connectivity.

Women.com added 11/16 to 4 1/2 after soaring 2 points on Monday, for a two-session gain of more than 100%. Hearst Communications is considering increasing its stake in the company.

Vignette declined 1 11/16 to 50 1/16 after announcing that its tender offer for OnDisplay had met with greater than 90% acceptance. OnDisplay fell 2 to 79 5/8.

Shares of Interwoven continued to look strong early but pulled back, up 1/4 to 118 5/16.

Internet infrastructure plays, which led the Nasdaq's recent run up, dropped sharply. Corning fell 19 1/4 to 255 1/8, SDL fell 19 to 274 15/16, and JDS Uniphase droppe