Wall Street: Friday mid-session

By GRAEME BEATON
Updated:

 

High techs were mauled again as more profit warnings and downgrades hit Wall Street. Blue Chips, which had previously held up well, were not spared in the latest slide.

The Dow Jones Industrial Average plunged 171.89 points or 1.63% to 10,354.92 by mid-session. The Nasdaq Index, in the midst of a bear market that has dropped it nearly 60% from record highs of a year ago, tumbled another 71.60 points or 3.19% to 2,173.36.

A pre-opening warning from Motorola, the world's second-biggest maker of cellphones, set the tone for the market drop. Motorola said 'significant weakness' could cause it to report losses in future quarters. Shares in Motorola, already hammered in the high tech downturn, lost another 73c or 4.2% to $16.56.

Sun Microsystems, which warned on Thursday night that its growth was slowing, fell 67c or 3.3% to $20.12. Its drop might have been cushioned by words from chief executive Scott McNealy, who said the company would maintain double-digit growth. 'We're not seeing the lights go out,' he said. 'Our gross margins are up. It's just that the economy is slowing down.'

IBM, which had been a tower of strength this year, crumbled $7.50 or 6.9% to $101.40. Qualcomm, which said the delayed introduction of a new wireless standard in Europe could hurt its outlook, stumbled $15.12 or 22.6% to $51.81. JDS Uniphase fell $1.18 or 3.9% to $29.37 on a broker downgrade.

Telecoms were weak. AT&T slid 68c or 3.2% to $20.64. Other Dow components feeling the heat included Citigroup, off 98c or 2% to $47.62, entertainment giant Walt Disney, off $1.25 or 4% to $29.75, Hewlett-Packard, lower by $1.17 or 4% to $28.60, and
J.P. Morgan Chase, falling $1.32 or 2.7% to $46.98.

'The bears are out of the cage at the moment,' said A.C. Moore, chief investment strategist at California's Dunvegan Associates. The profit warnings set the negative tone for the early market action and 'that filters through to the rest of the tech industry', Moore said.

Fresh tech slide as Motorola misdials

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