Tech stocks set for more struggles

Tech stocks set for more
struggles

Futures point to mixed open

NEW YORK (CBS.MW) – Tech retreated again, sending the Nasdaq lower
for the fourth straight session Wednesday while the Dow Industrials
traded close to the flat line out of the gate.

The Dow Jones Industrial Average ($DJ) added 8 points, or 0.1
percent, to 10,463.

The Nasdaq Composite ($COMPQ) fell 14 points, or 0.7 percent, to
2,002 while the Nasdaq 100 Index ($NDX) gave up 15 points, or 0.8
percent, to 1,748.

The Standard & Poor’s 500 Index ($SPX) slipped 0.1 percent while
the Russell 2000 Index ($RUT) of small-capitalization stocks lost 0.1
percent.

Volume came in at 71.6 million on the NYSE and at 141 million on the
Nasdaq Stock Market. Market breadth was mixed, with decliners matching
advancers both on the NYSE and the Nasdaq.

Specific movers

Networking stocks slipped following a slew of downgrades from UBS
Warburg.

Ratings were lowered on shares of ADC Telecom, Avici Systems (AVCI),
Cisco Systems (CSCO), Ciena (CIEN), Juniper Networks (JNPR), Nortel
Networks (NT) and Tellabs (TLAB).

Warburg said that its lowered view was based on further worsening of
U.S. telecom capital spending trends for 2001.

“As such, we believe the group is stuck in a trading range for
the next two quarters and perhaps longer. While we do not think there is
material downside in the group as most of the ‘bad news’ is in the
stocks, the poor telecom capital spending environment just makes it hard
for us to keep formal ‘buy’ ratings on these stocks,” the firm said
in a note to clients.

In other analyst actions, J.P. Morgan said it’s now market weight to
slightly underweight on the bank group vs. its previous overweight
positions. Analyst Catherine Murray said she believes the slowing
economy will affect banks’ future asset quality and that she’d avoid
names such as Bank of America (BAC), First Union (FTU)and KeyCorp. (KEY)
in favor of firms such as Citigroup (C), Wells Fargo (WFC) and Fifth
Third Bancorp (FITB).

In the Internet space, Amazon.com (AMZN) slumped 5 percent to $14.90.
The online retailer posted a narrower-than-expected loss in the first
quarter late Tuesday.

In the meantime, a slew of drug companies posted results Wednesday.

American Home Products (AHP) checked in with a first-quarter profit
from operations of 55 cents a share, in line with the First Call/Thomson
Financial estimate. The stock shed 0.2 percent.

Bristol-Myers Squibb (BMY) posted a first-quarter profit from
operations of 63 cents, a penny ahead of the Wall Street consensus
estimate. The company also said remains “comfortable” with the
current consensus estimates of $2.41 for full-year results. Shares lost
0.3 percent.

And Pharmacia (PHA) registered first-quarter earnings of 32 cents a
share, in line with the consensus estimate. The stock rose 0.3 percent.

Treasury focus

Treasury prices ascended, with respectable gains enjoyed across the
board.

The 10-year Treasury note was up 1/4 to yield ($TNX) 5.185 percent
while the 30-year government bond added 17/32 to yield ($TYX) 5.72
percent.

On the economic front, March durable goods orders rose 3 percent,
greater than the 1 percent advance that had been expected. Excluding
defense, durable goods orders rose 0.9 percent while excluding
transportation, orders slipped 1.8 percent.

“The rise in the headline reflects a 21.4 percent rise in
transportation orders — we had expected a 15 percent rise — mostly
civilian aircraft [as] Boeing reported 55 new orders in March, compared
to just 17 in February,” commented Ian Shepherdson, chief U.S.
economist at High Frequency Economics.

Still ahead: March new home sales, expected at 911,000, and March
existing home sales, expected at 5.14 million. View Economic Preview and
economic calendar and forecasts.

In the currency arena, dollar/yen inched down 0.1 percent to 122.23
while euro/dollar climbed 0.5 percent to 0.8986.