Market Watch

The Associated Press
Wednesday February 21, 2001

NEW YORK — Skittish investors sold off technology stocks Tuesday, pushing the Nasdaq composite index down more than 100 points for the second trading session in a row and sending all three major market indicators into negative territory for the year. 

In light trading following the Presidents’ Day holiday weekend, the Nasdaq composite index tumbled. Tuesday’s loss built on the 5 percent fall the Nasdaq made on Friday, when it dropped more than 127 points. 

“There’s a bit more of the defensive flavor in the market today,” said Charles G. Crane, market strategist for Spears, Benzak, Salomon & Farrell. 

Since late last year, investors have been retreating to safer stocks, such as those in the health care and consumer product sectors. They’ve focused their selling on riskier tech stocks, where earnings have suffered the most as the economy has slowed. 

But Tuesday’s selling put all three of the three major market indicators in negative turf for the year. The Nasdaq has slipped the most, down 4.4 percent. The Dow is now off 0.6 percent, and the S&P 500 has lost 1.7 percent. 

“There seem to be new victims on the list every day,” Crane said particularly of the tech sector. 

Tuesday’s tech victims included telecommunications companies that suffered after analysts reduced their outlooks on their stocks. The downgrades affirmed investors’ fears that it will take a while for the long-battered tech sector to recover. 

Nextel Communications fell $3.13 after Salomon Smith Barney lowered its rating on the stock. The brokerage cited Nextel’s difficulties retaining customers. 

Investors were disappointed by fourth-quarter earnings results, but the reason for their selling now is that profits aren’t expected to pick up until at least the second half of the year, analysts said. 

“The anticipation of anything good happening is not there anymore and the selling continues,” said Gary Kaltbaum, technical analyst at J.W. Genesis. 

— The Associated Press 

Falling tech prices also brought the Dow lower. Intel tumbled $2.94 to $31.44, hurt as it said that decreased demand for computer chips was prompting it to enact a cost-cutting plan, which includes job cuts through attrition. 

The Dow’s losses were curbed somewhat by retailing stocks. Investors rewarded companies withstanding a slowing economy and slumping consumer confidence. 

Wal-Mart rose $1.04 to $53.40 after reporting fourth-quarter results that beat Wall Street’s expectations by a penny. The discount retailer said quarterly earnings topped $2 billion for the first time. 

Another Dow retailer, Home Depot advanced $1.09 to $44.09 despite warning that it is still suffering soft sales and weak prices. Its fourth-quarter earnings met analysts’ lowered expectations. 

Declining issues outnumbered advancers slightly more than 8 to 7 on the New York Stock Exchange. Consolidated volume was 1.33 billion shares, down from 1.48 billion on Friday. The market was closed Monday in observance of Presidents’ Day. 

The Russell 2000 index, which measures the performance of smaller company stocks, finished down 8.14 at 491.14. 

Overseas markets also were mostly lower. Britain’s FT-SE 100 index lost 1.9 percent, Germany’s DAX index declined 1.0 percent and France’s CAC-40 index fell 0.6 percent. But Japan’s Nikkei index rose 1.0 percent. 


On the Net: 

New York Stock Exchange: http://www.nyse.com 

Nasdaq Stock Market: http://www.nasdaq.com