A bad week ended on a worse note for investors Friday as the Dow Jones fell for the ninth time in the past 10 trading days and shares of tech giants Sun Microsytems and AOL Time Warner were pounded.
The Dow tumbled 390 points, or 4.8%, to 8019, its lowest close since September 1998. The Nasdaq skidded 38 points, or 2.8%, to 1319. Only the final bell appeared to save the tech index from plummeting below 1300, as losses accelerated in the final hour of trading. Friday’s closing price was the Nasdaq’s lowest since April 1997.
The S&P 500 lost 37 points to finish at 844.
Investors were unimpressed by Sun Microsystems’ first profitable quarter in a year, focusing instead on the network server vendor’s downgrading of short-term prospects, which caused shares to nosedive 27% to $4.25 in heavy trading Friday. After Thursday’s close, Sun reported a fiscal fourth-quarter profit of one cent per share — ending four straight quarterly losses — on revenue of $3.4 billion. But the company forecast a slight loss and declining revenue for the current quarter as technology buyers continue to hold off on spending.
Like rival Sun, software giant Microsoft lowered its guidance for the near-term after Thursday’s session, but investors were more forgiving, with MSFT shares declining only 3%, or $1.55, to $49.56. While Microsoft slightly reduced sales forecasts and earnings estimates for the fiscal year ended June 2003, the company reported fiscal fourth-quarter earnings of $1.53 billion, or 28 cents a share.
AOL Time Warner , still rocked by management upheaval, fell 7%, or 87 cents, to $11.58 in Friday trading. On Thursday, Chief Operating Officer Robert Pittman — the No. 2 executive at the company and the man hired to turn around its online business — resigned after only three months on the job.
Other tech losers include security vendor VeriSign , which dropped 7% to $6.76 after a research report forecast slow sales for security software; and networking equipment vendor Cisco Systems
, which lost 5% to close at $13.65.
