RealTime IT News

Another Day, Another Drubbing

Well, this story line is getting monotonous.

For the fourth time in the past five trading days, Internet and technology stocks led all losers Tuesday as more earnings warnings sparked a massive selloff, with internet.com's Internet Stock Index, or ISDEX, nosediving 27.76, or 14.5%, to 163.63.

Every one of the ISDEX's 50 member stocks finished in the red, ranging from GoTo's 0.8% dip to Inktomi's 55.1% meltdown in response to the company's warning that Q2 losses will be larger than expected. INKT closed at $2.79. Thirty-five of the 50 ISDEX member stocks posted double-digit declines.

The Nasdaq dropped 110.34, or 6.2%, to 1672.63. Since edging over the 5000 mark in March 2000, the Nasdaq has lost about two-thirds of its value. The Dow Jones fell 292.62, or 3.0%, to 9485.31, while the S&P 500 tumbled 39.9, or 3.5%, to 1105.97.

All 13 Internet sectors had more decliners than advancers, with only 15% of all 'Net tickers ending on the plus side. For all sector breakdowns, visit WSRN's Internet sectors page.

For the second day in a row, B2B e-commerce software companies were especially hard-hit, with Ariba, i2 Technologies and BroadVision each plunging on bad financial news.

(For earnings reports, visit our earnings calendar and our reported-earnings page. For after-hours quotes and news, visit After Hours Trading.)

Ariba shares ended Tuesday down 31.7% to $4.44 after the company reported a loss of 20 cents per share, four times Wall Street estimates calling for a loss of 5 cents per share. ARBA said it would eliminate about 700 jobs, reducing its workforce by a third.

Commerce One tumbled 28.5% to $5.61 on a warning from the company that it projects a Q1 net profit of 2 cents per share, short of estimates of 5 cents per share.

BroadVision fell 34.0% to $2.97 after reporting it would have a loss in the first quarter of 16 cents to 18 cents per share, versus previous forecasts of a slight profit. It was the second consecutive one-day battering for BVSN, which tumbled 16% on Monday after rival Art Technology Group issued a Q1 warning.

i2 Technologies declined 12.6% to $13.50 on news that it will cut 610 jobs, or about 10% of its workforce.

Inktomi, the leading provider of search-engine and caching technologies, reported on Monday that its Q2 loss will be from 23 cents to 25 cents per share, much more than forecasts of a 4 cents per share net loss. INKT will lay off 25% of its 1,000 employees.

Here's some technical analysis from Paul Shread:

April 3, 4 p.m.: The Nasdaq 100 is sitting right on a critical support level, the last of its support from the mid-1998 peak (first chart). Much below where the index closed today (1398) and we could be looking at a retest of the October 1998 lows, another 300 points down from here. The only good news is that the Philadelphia Semiconductor Index, which usually leads the techs, outperformed the Nasdaq today. The Nasdaq is very oversold here, but we're getting tired of saying that. Another negative is the new closing low in the S&P 500 (second chart), which took out both 1140 and 1120 support today. 1080 could provide some support, but with all the negatives, we're beginning to suspect that the ultimate target for this bear market may be the 1984 bull market trendlines, at about 950 on the S&P 500, 8200 on the Dow, and about 1400 on the Nasdaq (fourth, fifth and sixth charts). Heck, at this rate the indexes could reach those levels in about three trading days. The Dow turned broke 9687 and 9500 support today (third chart). Next up is 9396, and then the 9150-9350 level.