Technology stocks extended their losses Thursday as investors continued to assess the economic fallout from last week's terrorist attacks.
The Nasdaq Composite fell 56.87, or 3.7%, to finish at 1470.93, after losing 1.8% Wednesday. Morgan Stanley's High Tech Index shed 16.57 to 369.01 and the Dow Jones Internet Index lost 2.43 to 40.71.
On Capitol Hill, Federal Reserve Chairman Alan Greenspan told Congress the terrorist attacks had disrupted the business activity in a number of ways, including a drop in consumer spending and travel and the stock market's four-day shutdown last week (see article). But Mr. Greenspan also said, "I am confident that we will recover and prosper as we have in the past."
Software stocks continued to tumble as investors worried that the terrorist attacks would hamper companies ability to close sales in the final weeks of the September quarter.
"All software is down. The sector is definitely under pressure," John Rizzuto, software analyst at Credit Suisse First Boston Corp., said.
PeopleSoft slipped 75 cents to $19.99, Siebel Systems shares lost $1.01 to $14, and CheckPoint Software fell $1.52 to $25.41, all on the Nasdaq Stock Market.
Cadence Design Systems dropped 69 cents to $16.23 on the New York Stock Exchange. John O. Barr, an analyst with Robertson Stephens cut his earnings and revenue estimates for the integrated-circuit design software provider amid continued weakness in information-technology spending. Mr. Barr now expects third-quarter earnings of 19 cents a share on revenue of $347.4 million, below his previous estimates.
SAP fell 50 cents to $23 on the Big Board. The German software giant said Thursday it will meet its earnings expectations for the first nine months of 2001, calming investors' jitters, but the German software giant left the door open to revise its full-year targets (see article).
EMC added 10 cents to $12.70 on the Big Board. The data-storage giant said Thursday it has acquired closely held Luminate Software for about $50 million in cash. Luminate develops performance-monitoring software for storage-intensive applications and operating environments.
Microsoft slid $3.11 to $50.76 on Nasdaq. The software giant called the remedies sought by the Justice Department in its antitrust case "improper" in its latest court filing, as the company prepares for a meeting next week with the new judge in the case (see article).
Meanwhile, Applied Materials and 3Com joined the list of companies announcing job cuts this week. Applied Materials fell $1.63 to $29.49, while 3Com gained 10 cents to $3.79, both on Nasdaq.
Chip maker Applied Materials said Thursday it plans to reduce its work force by about 2,000 positions, or 10%. It said it will take an undisclosed restructuring charge in the fiscal fourth quarter ending Oct. 28 (see article).
Networking-gear maker 3Com late Wednesday reported a wider-than-expected quarterly loss on a steep slide in revenue. The company also announced it will cut 1,000 more jobs than previously planned (see article).
Elsewhere, Leap Wireless International climbed $1.06 to $14.01 on Nasdaq after the wireless Internet company gained some flexibility in its financing agreements with vendors Telefon AB L.M. Ericsson, Lucent Technologies and Nortel Networks by amending covenants relating to capital expenditures and gross revenue.
Priceline.com rose 26 cents to $2.29 on Nasdaq. Cheung Kong and Hutchison Whampoa, two shareholders with a total stake of 27% in the Internet travel service, withdrew their request to file a shelf registration, which would have let them sell Priceline shares.
