RealTime IT News

Futures Drop On Intel Warning

Nasdaq futures fell 2% Thursday night after Intel warned that revenues will fall 25% sequentially, capping a day in which technology and Internet stocks sold off on an earnings warning from Yahoo.

The market was torn by competing Federal Reserve rumors during the day. Some took two speeches by Fed officials to mean that the Fed may only cut interest rates by 25 basis points when it meets on March 20, while others claimed the Fed could cut rates tomorrow if February unemployment data is weak enough.

The ISDEX http://www.wsrn.com/apps/ISDEX/ fell 16 to 266, and the Nasdaq lost 55 to 2168. The S&P 500 added 2 to 1264, and the Dow surged 128 to 10,858. Volume was unchanged at 1.12 billion shares on the NYSE, and 1.74 billion on the Nasdaq. Advancers led 16 to 13 on the NYSE, but decliners led 21 to 14 on the Nasdaq. For earnings reports, visit our earnings calendar at http://www.wsrn.com/apps/earnings/internet.xpl and reported earnings at http://www.wsrn.com/apps/earnings/ireported.xpl. For after hours quotes and news, visit our after hours trading site at http://www.afterhourstrading.com.

Nasdaq futures dropped about 40 points after Intel warned that its numbers will be even worse than previously forecast. Intel fell 3 to 30 7/8 after hours. The news could make for a tough IPO for Loudcloud tomorrow, the latest venture of Netscape co-founder Marc Andreessen.

Yahoo fell 3 3/16 to 17 3/4 after warning that the company will post breakeven results this quarter, 5 cents below estimates. Revenue of $170-$180 million will miss estimates of $230 million, and the company also announced that CEO and Chairman Tim Koogle will step down as CEO. The company will conduct an outside search to find a new CEO, but Koogle will remain as chairman. Yahoo also announced a $500 million stock buyback program.

Firms relying on Internet advertising were hit on the news. DoubleClick lost 1 5/16 to 12, and RealNetworks lost 1 1/32 to 7 3/16. CNET lost 1 1/8 to 9 7/16, and internet.com , publisher of this Web site, slipped 3/4 to 6 3/16 after both firms guided revenue estimates lower.

AOL Time Warner lost .80 to 44.50 after analysts defended the company.

Ariba fell 1 13/16 to 13 9/16, a new low, after issuing cautious comments at the Merrill Lynch Internet Conference.

EMC dropped 3.72 to 37.28 on a Wit SoundView downgrade and comments that the could be losing market share in Europe to Hitachi.

TIBCO fell 31/32 to 9 29/32 on an earnings warning. webMethods dropped 3 3/4 to 28.

Art Technology plunged 6 3/16 to 19 7/8 on multiple downgrades.

Extreme Networks , off 1 3/16 to 20 1/8, continued to get battered on earnings concerns.

Copper Mountain lost 3/4 to 3 23/32 on news of 25% layoffs andf the resignations of top officials.

Some technical comments on the market: Note: We are now including charts in the technical market commentary. If you can't get the charts via the e-mail newsletter version, try this link: http://www.afterhourstrading.com/column.html

The Nasdaq broke down out of a 50-point trading range at 2200 this morning, following through on two straight potential reversal days. But more importantly, the Nasdaq may have broken down out of a bear flag, with downside potential to about 1970, based on the size of the move preceding the formation of the flag (see first chart below). Critical support on