Tech stocks fall, GM helps Dow


  • Business
  • Sunday, 12 Jun 2005

BY MEGAN DAVIES

NEW YORK: US technology stocks fell on Friday after the world's largest chipmaker, Intel Corp, raised its second-quarter outlook by less than some investors had hoped, but gains in General Motors Corp pushed the blue-chip Dow slightly higher. 

General Motors jumped 8%, or US$2.70 to US$34.51, after the United Auto Workers union said it supported negotiations with the world's largest automaker to help cut its massive health-care costs. 

The Dow Jones industrial average closed up 9.61 points, or 0.09%, at 10,512.63. The Standard & Poor's 500 Index was down 2.82 points, or 0.23%, at 1,198.11. The tech-heavy Nasdaq Composite Index was down 13.91 points, or 0.67%, at 2,063.00. 

For the week, the Dow edged up 0.50%, the S&P rose 0.18% and Nasdaq dipped 0.41%. 

Stocks closed the session up from their lows, as buyers moved in late in the day. 

“Even though we've been on the canvas for most of the day, in the last half-hour the market has put on a bit of a lift, which before the weekend is fairly impressive,” said Al Goldman, chief market strategist at A.G. Edwards. 

He added that stocks had been easing the past few days after a rally of several weeks. 

Intel's outlook dragged on the chip sector. While it raised its revenue and profit margin forecast for the second quarter, the outlook failed to top already-high expectations by investors. 

Shares of Intel were 2.6% lower, down 72 cents to US$26.98. The Dow component had been climbing since April, rising 25% from recent lows.  

“Yesterday's mid-quarter update wasn't enough to get everyone excited enough to jump on the stock,” said Greg Palmer, Head of Equity Trading at Pacific Crest Securities. “People were hoping for a much better outlook. Everyone was really expecting things to be significantly better ... and it wasn't enough to get everyone fired up.” 

The Philadelphia Stock Exchange semiconductor index fell 1.8%. 

Shares of Apple Computer Inc also weighed, sliding 4.9% after a report that Microsoft Corp was developing a subscription-based online music service – a potential rival to Apple's iTunes music store. 

Apple shares fell US$1.84 to US$35.81 after technology news Web site Cnet, citing unnamed sources familiar with the plans, reported on Thursday that Microsoft was planning to bolster its own online song store with a new subscription service later this year. 

Shaw Wu, an analyst with American Technology Research, said Apple's stock was weak due to concerns about competition from Microsoft. “Apple is a volatile stock,” he added. 

Telecom equipment supplier Nortel Networks Corp fell 8.5%, or 24 cents, to US$2.57 after it said Chief Operating Officer and President Gary Daichendt had resigned over clashing views with Chief Executive Bill Owens.  

Also in the technology sector, Adobe Systems Inc., maker of Acrobat document-sharing software, slid 4.2%, or US$1.36, to US$31.13. Software maker Macro- media Inc, which is being acquired by Adobe, on Friday said it was restating six years of results, cutting its reported earnings from fiscal years 2002 to 2004. Macromedia fell 4.3%, or US$1.85, to US$41.66. 

Trading was moderate, with 1.25 billion shares changing hands on the New York Stock Exchange, below the 1.46 billion daily average for last year. About 1.43 billion shares were traded on Nasdaq, below the 1.81 billion daily average last year. Advancers and decliners were about even on the New York Stock Exchange. Decliners outnumbered advancers by 8 to 7 on Nasdaq. – Reuters  

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