Up again, down again; it's just the nature of the game.
Tech stocks sold off lightly in morning trading, as Microsoft's lowered guidance stirred up concerns. Notable exceptions were Sun Microsystems and eBay, both of which posted mild gains after their own earnings calls Thursday.
On Thursday, decent news from IBM, Nokia and Dell had buyers upping techs. But fickleness returned on Friday, as traders retreated a bit.
As of 11 a.m. EDT, the Nasdaq composite had dipped 15.64, or 0.76 percent, to 2030.95. The Dow Jones Industrial Average lost 29.27, or 0.28 percent, to 10580.73, weighed down mostly by Microsoft and Intel. The Standard & Poor's 500 lost 1.58, or 0.13 percent, to 1213.44. The Industry Standard 100 fell 1.59, or 0.45 percent, to 355.08.
Microsoft lost $4.23, or 5.83 percent, to $68.34. The company delivered better-than-expected revenue numbers and took its $3.9 billion one-time charge in stride. But what had traders selling off the stock on Friday was the firm's outlook for the September quarter – lowered guidance on what Microsoft's CFO called "slower PC growth rates than any of you have modeled."
PC-makers Dell and Compaq both fell roughly 2.85 percent on the words. Gateway lost $2.41, or 16.52 percent, to $12.18 after reporting a second-quarter loss and slashing full-year estimates.
Chipmakers Intel, Advanced Micro Devices and Micron all fell on the Microsoft outlook.
Countering the trend, network computing leader Sun Microsystems gained 93 cents, or 6.44 percent, to $15.37. The company, whose Java programming language supposedly will not be supported in the upcoming Windows XP, beat lowered estimates for the quarter but was fairly reticent about guidance.
Shares of eBay went up $2.35, or 3.65 percent, to $66.75. The online trading play and current darling of Internet investors beat analysts' estimates and raised its forecasts for the year, saying that new products and international expansion will fuel revenue growth. Amazon and Yahoo both followed in eBay's footsteps, rising 2 percent and 3 percent, respectively.
Telecom equipment investors were split between selling equipment maker Nortel, which followed through on reporting a steep loss, and buying wireless infrastructure and mobile-handset maker Ericsson, which met second-quarter estimates as sales came in ahead.
Nortel lost 1.9 percent to $7.60. Lucent gained 6 percent to $7.66 on the news, as Alcatel fell 4.8 percent to $16.05.
Ericsson gained 1.3 percent to $4.77 as both Nokia, which surged on Thursday, dropped 1.4 percent and Motorola lost just 0.68 percent.
Networking chip player PMC-Sierra fell $2.56, or 8.18 percent, to $28.75. The company posted a second-quarter loss in line with expectations but showed a further drop-off in sales. Vitesse and Xilinx fell 3.2 percent and 4.3 percent, respectively, on their own reports. Applied Micro Circuits lost 5 percent to $16.01.
Contract manufacturer Flextronics was flat at $24.92, despite coming in a penny below estimates for the quarter. Cisco, one of Flextronics' primary customers, gained 22 cents, or 1.24 percent, to $17.98.
B-to-b play Commerce One lost $1.01, or 20.65 percent, to $3.88, after reporting a wider-than-expected loss. Cable equipment supplier Scientific Atlanta lost $13.38, or 38.14 percent, to $21.70 on a raft of downgrades in response to lower revenue in the past quarter.
On the flipside, Network Associates, which makes security software, gained $2.43, or 21.52 percent, to $13.72 after beating estimates.
