RealTime IT News

Priceline, Dell Weigh On Stocks

The stock market's recovery ran into a stiff headwind on Thursday, as an earnings warning from Dell Computer and an announcement that Priceline.com will shut down its WebHouse Club operations sent stocks lower.

The ISDEX lost 17 to 704, and the Nasdaq fell 51 to 3471. The S&P 500 added 1 to 1436, but the Dow fell 60 to 10,724. Volume rose slightly to 1.17 billion shares on the NYSE, but fell to 1.85 billion on the Nasdaq. Decliners leading by 15 to 12 on the NYSE and 23 to 15 on the Nasdaq. The big economic report for the week is tomorrow's unemployment report. Analysts expect a 225,000 increase in non-farm payrolls and a 4.1% unemployment rate. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our after hours trading site.

Priceline cratered 3 19/32 to 5 25/32 after announcing it will shut down WebHouse, a privately-held licensee of the company that allows consumers to bid for gas and groceries. Analsyst took it as a sign that Priceline's business model doesn't work, and Salomon Smith Barney downgraded the stock to Neutral. Amazon.com , another company whose business model has been questioned, dropped 2 7/16 to 33 9/16.

Yahoo fell 3 1/4 to 84 11/16 after trading as high as 90 5/8. The company, which has sold off on earnings concerns, reports its results on Tuesday. Merrill Lynch said that the company's cash flow provides a valuation advantage that investors should consider: the firm estimates Yahoo's 2001 earnings at 80 cents a share, but free cash flow at $1.50-$2.00.

RSA Security surged 5 9/16 to 45 1/16 after announcing that earnings for the third quarter will be 24 cents, a penny better than estimates. The company also announced a 4 million share buyback.

The parade of earnings warnings continued. Breakaway Solutions dropped 2 15/16 to 4 9/16 after warning that it will post a 2-4 cent loss; analysts expected a penny loss. Harmonic Lightwave plummeted 9 13/16 to 13 on an earnings warning, and FreeShop slipped 5/16 to 3 1/8 after guiding estimates slightly lower.

America Online , up 2.50 to 61.15, continued to rise on comments from Merrill Lynch that the company's merger with Time Warner should be approved by the end of the month. At 2001 estimates of at least $1.00, Merrill said the combined company's valuation is attractive. Also, Time Warner and EMI put off their planned merger to win approval from the European Commission for the AOL deal.

i2 Technologies gained 10 1/8 to 169 1/2 on a Wit SoundView Strong Buy rating and $215 price target. But other B2B stocks were weak. Ariba fell 12 7/8 to 116 7/8, and Commerce One dropped 4 3/8 to 61 7/8.

VeriSign rose 9 3/4 to 193 5/16 on an expanded alliance with Motorola .

Internet Capital Group lost 3 3/16 to 12 1/2 on a Lehman Brothers downgrade to Neutral. Lehman said the company is unlikely to be able to bring more companies public until next year.

E.piphany rose 4 5/8 to 68 7/8, but down from an intraday high of 73 1/8, as the stock continued to rally on news of an alliance with Sun Microsystems .

Covad added 1 1/8 to 11 7/16 on a CE Unterberg Towbin Strong Buy rating and $47 price target. The firm said the current market environment is huttidn down competitors and there are signs of price stability.

EXFO fell 3 1/4