Disappointing Profits Weigh Down Tech Stocks
Technology stocks led the market lower Tuesday as a weak profit report by a leading software company fanned worries about how well U.S. companies will weather the economic crisis in Asia.
The Dow Jones industrial average fell 61.18 to 8,049.66 despite nearly erasing an early 85-point slide. Broader indexes also faltered in a midday recovery, but the only major damage came in the technology-laden Nasdaq market as shares of Oracle, the leading name in database software, tumbled by nearly 30 percent on record volume.
More than 172 million shares of Oracle were traded, the busiest day ever for an individual stock, as investors chafed at late Monday’s disappointing profit report by the company.
Oracle attributed the weakness to the economic troubles in Asia and unfavorable exchange rates, and warned that those problems may continue for months.
But while Oracle slid 9-7/16 to 22-15/16, slicing more than $9 billion from its market value, the selling never grew very intense outside the technology group.
“Oracle is not Intel, and so the problems at Oracle don’t have the same impact,” in terms of what the news says about the technology industry or the overall economy, said Ricky Harrington, a technical analyst at Interstate/Johnson Lane.
Some of the stocks that moved substantially or traded heavily Tuesday:
NYSE
Hilton Hotels, down 15/16 at 28-7/16.
The company warned that its fourth-quarter results have been hurt by sluggish growth in its casino business. Hilton, based in Beverly Hills, Calif., also blamed delays in the opening of a “Star Trek” attraction at the Las Vegas Hilton and the closure of a New Orleans riverboat casino.
Guidant, up 2-9/16 at 64.
The Indianapolis-based medical device maker is recalling a new defibrillator because it has caused some hearts to race, leaving patients at risk of a heart attack. No deaths have been reported from the Ventak AV defibrillator.
NASDAQ
Oracle, down 9-7/16 at 22-15/16.
The database software leader’s profit for its second quarter ended Nov. 30 had risen just 4 percent, well below expectations. Oracle attributed the weakness to the economic crisis in Asia and unfavorable exchange rates.
Neurogen, down 6-3/4 at 13-5/8.
The drugmaker reported discouraging findings from a clinical trial with a proposed treatment for obesity that Neurogen is developing with Pfizer. Neurogen, based in Branford, Conn., said some of the patients given NGD 95-1 experienced an unexpected increase in certain liver enzymes.
Protein Design Labs, down 7-3/8 at 39-3/8.
Boehringer Mannheim GmBH terminated a clinical study with OST 577, an anti-hepatitis B antibody developed by Protein Design, and decided to surrender its rights to the product.