Midday Report: Nasdaq Slips as Semiconductors Drop

The Nasdaq Composite Index was in danger of ending a four-day winning streak Monday, as reports of a cautionary note on semiconductor stocks from Morgan Stanley Dean Witter pulled the technology sector lower in morning trading.

At midday, the tech-heavy Nasdaq index was down 23.10 at 1,938.33, led by a 6 percent decline in Cisco Systems (Nasdaq: CSCO) and a 7 percent drop in Intel (Nasdaq: INTC).

Morgan Stanley Dean Witter reportedly advised caution on a number of semiconductor companies, including Intel, Broadcom (Nasdaq: BRCM) and Xilinx (Nasdaq: XLNX), saying demand for chips is likely to remain weak for the rest of the year.

Broadcom was down US$3.38 at $32, while Xilinx was down $1.22 at $39.92. Morgan Stanley reportedly lowered ratings on the companies, while cutting estimates for Intel’s earnings this year and next.

The Standard & Poor’s 500 stock index was down 2.30 at 1,181.20, while the Dow Jones Industrial Average was up 12.23 at 10,139.17.

Webvan Falls on CEO Exit

The E-Commerce Times Index was down 1.53 percent at midday, led by a drop of almost 17 percent in Webvan Group (Nasdaq: WBVN).

Webvan, down 2 cents at 10 cents, said late Friday that chairman and chief executive officer George Shaheen resigned. Shaheen, who had been CEO since 1999 and took over as chairman in February, said the online grocer needs “a different kind of chief executive” to guide it through the current market.

Webvan shares are in danger of being delisted from Nasdaq. The shares have traded below $1 apiece since November.

Outpost, Expedia Rise

Computer products e-tailer Outpost.com (Nasdaq: COOL), meanwhile, rose 3 cents to 22 cents after naming a new chief executive and slashing its workforce by 30 percent, firing 110 employees. The company also reported quarterly results that were in line with Wall Street expectations.

Online travel operator Expedia (Nasdaq: EXPE) was up $1.38 at $19.05 after issuing a rosy forecast for the quarter ended March 31st. The company, which is controlled by Microsoft (Nasdaq: MSFT), said it expects a profit before special charges for the period.

Ameritrade (Nasdaq: AMTD) was down 18 cents at $5.48 after announcing plans to let go 14 percent of its workers and cut advertising spending by 25 percent. The online brokerage said the moves will help cut costs by about $12 million a year.

The announcement came after the close of trading Thursday. U.S. markets were closed Friday.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

Related Stories

LinuxInsider Channels