Gloomy outlooks and news of job cuts from Palm Computing (Nasdaq: PALM) andNortel Networks (NYSE: NT) sent stocks tumbling Wednesday, with thetech-heavy Nasdaq Composite Index down 81.26 to 1,891.00 at midday.
The selloff follows a report Tuesday that consumer confidence rose in Marchfor the first time in six months. The news helped drive stocks higher, butby midday Wednesday it did not appear that those gains would hold.
The Standard & Poor’s 500 stock index was down 26.31 at 1,155.86, and the Dow Jones Industrial Average was down 202.17 at 9,745.37. Reports that media giant Disney (NYSE: DIS) is cutting jobs also sent the broader market lower, as investors fretted that the weak economy was hurting companies in sectors other than the hard-hit technology sector.
Nortel, Palm Warn
Meanwhile, the bad news from the tech companies continued. Canadiantelecommunications equipment maker Nortel was down $2.82 to $13.94 after again reducing estimates for the current quarter and announcing a new round of layoffs.
Palm was down $7.19 to $8.31, dragging rival handheld computer makerHandspring (Nasdaq: HAND) along with it, after saying a deteriorating economy has led tolower orders, and it will lay off 250 workers and postpone the construction of anew headquarters building.
Handspring was down $4.25 to $11.94 even after it reaffirmed its financialtargets for the year ending June 30th following its rival’s report.
“Whileno company is immune to current economic conditions, we see continued salesgrowth in our business at this time,” said Handspring founder and chiefexecutive officer Donna Dubinsky.
ADC Telecommunications (Nasdaq: ADCT) was down $1.59 to $8.97 after thecompany, which makes fiber optics, network equipment and software forbroadband networks, said an “extremely challenging economic environment anda further slowdown in capital spending by communications service providers”will mean lower-than-expected results for the quarter ending in April. The Minneapolis, Minnesota-based company also said it will cut 3,000 to 4,000 jobs.
The E-Commerce TimesIndex was down 5.8 percent at midday, led by drops in Amazon.com(Nasdaq: AMZN), eBay (Nasdaq: EBAY) and Travelocity (Nasdaq: TVLY).However, Drugstore.com (Nasdaq: DSCM), 1-800 Flowers (Nasdaq: FLWS) and EggheadSoftware (Nasdaq: EGGS) were higher.
There were some bright spots in the tech gloom. Agere Systems (NYSE: AGR) — aspinoff of Lucent Technologies (NYSE: LU) — picked up 3 cents to $6.03 in itsfirst day of trading on the New York Stock Exchange.
Another highlight was PurchasePro (Nasdaq: PPRO), which picked up 19 cents to $7.44 after announcing a package of 10 new services aimed at beefing up the offerings that Internet giant America Online provides to small and mid-sized businesses through AOL’s Netscape Netbusiness division. AOL linked with Las Vegas, Nevada-based PurchasePro last fall, shortly after unveiling the Netbusiness product.