RealTime IT News

Investors Head For Hills Ahead of the Weekend

Investors headed for the hills ahead of the weekend, ignoring an impressive string of earnings results and favorable economic numbers this week. A favorable consumer price index slipped 0.1% in August, suggesting inflation may be under control, but it wasn't enough to ease worries of soaring energy prices that look sure to reverse the falling CPI trend in September. Blue chips and tech stocks alike were hit hard by profit taking across the board, sending the Dow plummeting 160.47 to 10.927.00, while the Nasdaq sank 78.85 to 3,835.01, down 4% on the week. The ISDEX fell in sympathy, down 1.39% for the day.

Oracle tumbled 6 5/8 to 78 5/16 even after soundly thumping analysts' quarterly earnings forecasts. The world's second largest software firm reported results of $0.17 per share, four cents ahead of estimates, while announcing a 2-for-1 stock split set to take effect October 13. But investors sold the news, sending the stock crumbling 11% for September.

Investors cheered earnings from another software maker, pushing Adobe Systems up 7 1/4 to 132 5/8, or 6% on the day. Shares received a boost following a 2-for-1 stock split announcement and Q2 earnings of $0.57 per share, a nickel better than Wall Street estimates.

Investors jeered earnings results from Linux services firm Red Hat , despite edging past consensus forecasts, reporting a narrower than expected loss of a penny. Shares took a fall, down 4 1/16 to 21 3/16, or 16%, following a downgrade by ABN Amro to a "market perform" from a "buy," citing revenue numbers that met only the minimum expectations.

PSINet crumbled to a new 52-week low, showing signs that the ISP may be struggling to make the transition to broadband Net access. Shares dropped 2 11/16 to 11 3/4, after the company announced that it would need to raise an additional $600 million by the end of next year in order to finance future growth. Morgan Stanley wasted little time downgrading the stock to "neutral" from an "outperform" following the troubling news.

Bay area-based MyPoints.com shares nearly received a 25% haircut, down 2 3/8 to 7 5/8, after Merrill Lynch warned clients that the direct e-mail marketer's third quarter numbers would be vulnerable to a overall slump in online advertising.

Shares of CMGI slipped 2 3/8 to 37 3/4, after the incubator's majority-owned subsidiary AltaVista said it would slash 225 jobs, or a staggering quarter of its total workforce. The portal announced it would exit the Internet media network business and concentrate on its search technology, hoping the change of direction and path to profitability will be enough to get its struggling IPO plans off the ground.

Paul Shread is on assignment. His technical commentary will resume Monday, September 18.