Tech Rally Undone by Financial Woes

An early rally in tech stocks came undone Tuesday by yet another bout of selling in financial stocks.

A rumor that Lehman Brothers (NYSE: LEH) was seeking emergency funding from the Federal Reserve sparked the selling. Stocks recovered somewhat after Lehman denied the rumors, but Lehman still ended the day nearly 10% lower and the Dow down 100 points. Lehman will report quarterly results June 18.

Level 3 (NASDAQ: LVLT) jumped 8% on a UBS upgrade, and Dell (NASDAQ: DELL) rose 3%, adding to its gains from last week’s earnings report.

National Semi (NYSE: NSM) gained 3.5% ahead of its earnings report on Thursday.

Infineon (NYSE: IFX) rose 6% on upbeat company comments, and SanDisk (NASDAQ: SNDK) climbed 5.5% after a Think Equity analyst predicted improved flash pricing.

Oracle (NASDAQ: ORCL) added 1%. The company reports quarterly results June 25.

Chinese telecom stocks were weak after a low takeover bid for China Netcom (NYSE: CN).

Sun (NASDAQ: JAVA) was down 4% after losing its global sales chief to HP (NYSE: HPQ).

Garmin (NASDAQ: GRMN) rose 4.5% on speculation about an iPhone deal with Apple (NASDAQ: AAPL).

Speedus (NASDAQ: SPDE) shares doubled on a solid state storage deal.

The Nasdaq lost 11 to 2480, the S&P fell 8 to 1377, and the Dow tumbled 101 to 12,402. Volume rose to 4.33 billion shares on the NYSE, and 2.24 billion on the Nasdaq. Decliners led by a 20-13 margin on the NYSE, and 16-12 on the Nasdaq. Downside volume was 61% on the NYSE, and 64% on the Nasdaq. New highs-new lows were 75-87 on the NYSE, and 70-117 on the Nasdaq.

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