Investors returned from the July 4th trading with a hangover. A profit warning from British telecom manufacturer Marconi set the tone early in the day with most techs dragged lower. Marconi closed the day down 52.3 percent.
With little positive news to counter the bad news from London, Blue Chips opened lower and stayed down. The DJIA closed down 90 points, with volume 2 percent lower than average over recent weeks. NASDAQ closed down 60.7 points or 2.83 percent.
One of the few bright spots was Amazon
which recieved an upgrade from Bear Stearns analyst Jeffrey Fieler. The stock was up 8 percent to close at $15.27 on heavy volume as shorts scrambled to cover their positions. Fieler said Amazon should post results well ahead of expectations and raised his estimate on second quarter sales to $700 million. The consensus forecast has been $688 million. Fieler also set a price target of $30 for the stock.
Other stocks did not fare as well. Only seven ISDEX stocks gained and the overall index was down 3.7 percent to close at 228.9
Leading the downward charge was I2 Technologies
, down 12.7 percent after the company warned before the market opened that sales would not meet expecations. The consensus estimate had been a loss of six cents a share; the company is now saying it expects a loss of 12 cents a share (after special charges). The company said the shortfall is a result of price cutting; I2’s average sale is down to about $1 million from $1.9 million per license a year ago. Revenue for the quarter is expected between $235 and $240 million.
tested a new one-year low on light volume and general weakness in the telecom sector. The stock closed at 28.50, down 8.8 percent; the 52-week low is 27.8.