Cautious Investors Dump Technology Stocks
Technology stocks dragged the market lower Tuesday amid growing doubts about continued earnings growth for computer chip makers and other industries.
The Dow Jones industrial average lost 67.55 to finish at 5,130.13, its worst one-day loss since Dec. 18, when it shed 101.52 points. The blue chip index had fallen by as much as 80 points in the last half hour of trading.
The technology-laden Nasdaq composite index plunged below 1,000 for the first time since October, losing 33.56 to close at 998.81.
Many market analysts said investors are moving to insulate themselves against a possible market retreat, taking profits after last year’s impressive gains in technology and less volatile sectors.
“There’s growing awareness that earnings growth is going to slow down even if the economy continues to grow,” said Mark Mallon, president of Federated Investment Counseling in Pittsburgh. “The market is overvalued and it’s not surprising to see increased volatility and some correcting.”
Declining issues led advancers by almost 2 to 1 on the NYSE, where volume totaled 416.67 million shares as of 4 p.m.
Some of the stocks that moved substantially or traded heavily Tuesday:
NYSE
National Semiconductor, down 4-3/4 at 17.
Texas Instruments, down 3-5/8 at 45.
Cypress Semiconductor, down 1-5/8 at 10-5/8.
Motorola, down 3-1/4 at 53.
IBM, down 2-3/8 at 86-3/4.
Compaq Computer, down 2-3/8 at 457/8.
Hewlett Packard, down 2 at 77-5/8.
Semiconductor stocks slid after SoundView Financial cut its rating on National Semiconductor and Texas Instruments. Josephthal Lyon & Ross lowered also lowered its view of the industry. The downgrades gave investors greater reason to move away from the more volatile technology sector.
Trump Hotels & Casino Resorts, down 2-5/8 at 19-1/8.
The company announced late Monday that it agreed to buy Donald Trump’s Taj Mahal casino in Atlantic City for $81 million.
NASDAQ
Applied Materials, down 3-3/4 at 33-5/8.
Intel, down 2-5/8 at 55.
Sun Microsystems, down 2-3/4 at 37-3/8.
Cisco Systems, down 5-7/16 at 65-3/8.
Microsoft, down 6-1/16 at 80-3/16.
Apple Computer, down 1-7/8 at 32-3/4.
3Com, down 5-3/16 at 37-3/4.
Nasdaq-issue technology stocks also fell on the dim outlooks for the semiconductor industry.
Symantec, down 5 to 10-3/8
The software maker announced late Monday that its results for the last three months of 1995 would be below analyst projections. Sales of Microsoft’s Windows 95 operating system have been disappointing, resulting in lower than expected sales of Symantec products.