Technology shares slip midsession on Mideast fears
Technology shares were lower midsession, with the Nasdaq composite hovering near its lows for the day amid worries about the upcoming earnings season, with fears of ongoing tensions in the Middle East continuing to weigh on sentiment, dealers said.
At 1.30 pm, the Nasdaq composite traded 10.76 points lower, or 1.59%, at 1,793.64. The index opened at 1,809.59 and traded in a range of 1,781.80-1,813.36.
Volume was 1.1 billion shares, with 1,337 stocks rising, 1,937 declining and 290 remaining unchanged on the day.
The Nasdaq 100 lost 19.31 points, or 1.37%, to 1,391.10 and the Philadelphia semiconductor (Sox) index gave back 13.91 points or 2.37% to 573.38.
On the broader market, the DJIA lost 57.71 points, or 0.56%, to 10,255.00 and the S&P 500 eased 6.37 points, or 0.57%, to 1,130.39.
Speculation that the FOMC may move interest rates higher at its meeting next month also dampened sentiment towards technology companies, as they tend to borrow greater amounts of money than old economy firms, dealers said.
Jefferies & Co chief market strategist Art Hogan told AFX News that investor concern over upcoming quarterly earnings reports is unjustified.
"I think the upcoming earnings is going to be terrific," Hogan said, adding that of S&P 500 companies that have pre-released results, many have surprised on the upside.
Analyst caution of late on results at bellwether IT companies added to depressed investor sentiment towards the sector, dealers said.
Micron lost $1.52, or 4.69%, to 30.88 after Morgan Stanley downgraded the stock to 'underweight' from 'equal weight' on weak industry fundamentals and seasonal weakness. The analysts, however, maintained a price target of $55.0 on the stock.
Intel traded down $0.43, or 1.43%, at 29.60, Motorola slipped $0.29, or 1.99%, to 14.26 and Texas Instruments fell $0.50, or 1.48%, to 33.25.
Analysts at Merrill Lynch expect TI to meet but not beat their first-quarter sales estimate calling for a "conservative" 1.3% quarter-on-quarter gain.
HP lost $0.14, or 0.80%, to 17.31 and Compaq traded down $0.40 or a sharper 3.92% at 9.80. A US judge will hold a hearing on Sunday relating to Walter Hewlett's lawsuit to block the merger of the two companies.
Dell and Microsoft said they formed a pact to develop hardware and software components for technology to increase data throughput performance for high-density racks of servers, storage and other network devices.
Dell shares lost $0.39 or 1.47% to 26.18 and Microsoft traded $1.32 lower, or 2.3%, at 55.98.
