IBM Leaves Investors Feeling Blue

IBM posted better than expected results late Thursday, but tech investors showed no signs of letting up after two days of heavy selling in the sector, sending Big Blue’s shares 5% lower in after-hours trading.

IBM’s fourth-quarter sales rose more than 7 percent to $26.3 billion, beating $25.7 billion forecasts, and earnings of $2.26 a share were 7 cents better than Wall Street analysts expected.

Big Blue’s services revenues and bookings were strong, as were software sales, but an anemic rise in hardware sales apparently gave investors the excuse they were looking for to sell. Unexpectedly strong services bookings could also mean thinner margins in future quarters.

Whatever the reason, with IBM shares up 30% since August, investors were quick to take profits.

Tech stocks tumbled during the day on a weak forecast from Apple , which saw its shares skid 6%. Stronger than expected consumer inflation also fueled selling.

Lam Research and also fell on their earnings news. Lam’s results sent the chip equipment sector to steep losses on the day.

Hoku doubled on a deal with Sanyo Electric.

Dell slipped on news that it continues to lose PC market shares to HP .

The Nasdaq fell 36 to 2443, the S&P 500 lost 4 to 1426, and the Dow gave back 9 to 12,568. Volume rose to 2.82 billion shares on the NYSE, and 2.54 billion on the Nasdaq. Decliners led 19-12 on the NYSE, and 21-8 on the Nasdaq. Downside volume was 58% on the NYSE, and 82% on the Nasdaq. New highs-new lows were 206-25 on the NYSE, and 97-61 on the Nasdaq.

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