A Rough Day For Yahoo

Yahoo slumped 6% Thursday on an analyst downgrade and concern about a possible loss of business from Microsoft .

Salomon Smith Barney downgraded Yahoo to Hold from Buy, saying the stock has gotten ahead of the fundamentals after a 60% run-up since March. Yahoo kicks off earnings season next Wednesday, and analysts expect the company to report earnings of 8 cents a share, double the company’s year-ago results.

Yahoo’s first-quarter results released in April beat estimates soundly, so investors likely are expecting the same next week. The high end of the estimate range is 10 cents.

Yahoo also got hit by concerns that its Overture subsidiary could lose Microsoft’s business as part of the new MSN search service.

Stocks fell Thursday on earnings warnings and weaker than expected manufacturing, jobless claims and auto sales reports, as traders digested the Federal Reserve’s first interest rate increase in four years. June employment data will be released Friday morning.

The Nasdaq fell 32 to 2015, the S&P 500 lost 11 to 1128, and the Dow slumped 101 to 10,334. Volume rose to 1.49 billion shares on the NYSE, but declined to 1.75 billion on the Nasdaq. Decliners led 18-14 on the NYSE, and 21-9 on the Nasdaq. Downside volume was 78% on the NYSE, and 81% on the Nasdaq. New highs-new lows were 56-10 on the NYSE, and 36-23 on the Nasdaq.

After the close, Maxtor and eSpeed warned, and Sybase missed estimates.

During the day, Emulex , iPass , MSC.software , Colt Telecom and Amkor plunged on warnings.

FindWhat fell 8% after reaffirming guidance.

SportsLine soared 51% on a buyout offer from Viacom .

Nu Horizons and Trident climbed 7% each after beating estimates.

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