Red Hat Rocks as RIM, Stocks Drop

Red Hat (NYSE: RHT) was a rare bright spot for the stock market on Thursday, but a disappointing sales report from Research in Motion (NASDAQ: RIMM) after the bell could make Friday another tough day for stocks.

RIM reported quarterly sales that were below Wall Street expectations after the market closed, and the company’s new subscribers, BlackBerry shipments and current quarter revenue outlook also were weaker than expected.

RIM’s adjusted earnings of $1.03 a share were 3 cents better than the Thomson Reuters forecast, but a 37 percent increase in sales to $3.53 billion was $100 million less than expected.

RIM shares plunged 9 percent in after-hours trading on the news, and Apple (NASDAQ: AAPL) and Palm (NASDAQ: PALM) also lost ground in extended trading.

Red Hat was one of the few standouts during the day, its shares up 12 percent on better than expected earnings and sales.

But the rest of the market slumped for a second day on an unexpected decline in existing home sales that added to growing fears about the pace of economic recovery.

Qualcomm (NASDAQ: QCOM), Oracle (NASDAQ: ORCL), IBM (NYSE: IBM), EMC (NYSE: EMC) and VMware (NYSE: VMW) managed small gains on the day.

AMD (NYSE: AMD) fell 6 percent, and Electronic Arts (NASDAQ: ERTS) lost 3 percent after Microsoft (NASDAQ: MSFT) denied reports that it is interested in acquiring the company.

Conexant (NASDAQ: CNXT) plunged 18 percent on a discounted stock offering.

Lithium-ion battery maker A123 Systems (NASDAQ: AONE) soared in its IPO.

The Nasdaq lost 23 to 2107, the S&P 500 fell 10 to 1050, and the Dow lost 41 to 9707. Volume declined to 5.05 billion shares on the NYSE, and 2.64 billion on the Nasdaq. Decliners led by a 28-9 margin on the NYSE, and 20-6 on the Nasdaq. Downside volume was 86 percent on the NYSE, and 83 percent on the Nasdaq. New highs-new lows were 181-31 on the NYSE, and 47-7 on the Nasdaq.