Tech Stocks Take Aim on New Lows as Nasdaq Feels for a Bottom

New data confirming that an economic slowdown is in progress pinched tech stocks, while a respected financial analyst worries PC sales may disappoint investors this holiday season. Appleis stock was down for a second day.

At first stocks tried to rally on the weak economic news, since it might persuade the Federal Reserve to soften its tightening bias and even consider lowering interest rates, but fear of a hard landing more than offset any benefit a less conservative Fed might bestow.

A Salomon Smith Barney report by Richard Gardner lowered hopes for the PC vendor stocks today saying, "personal computer inventory levels are high and demand is lagging," Reuters reported. "At this point we are expecting a disappointing December quarter for PC OEMs (original equipment manufacturers). Depending on holiday demand and quarter-end inventory levels, these disappointing results could continue into the first quarter,ii Gardner wrote.

Appleis stock dipped 21/32, or -3.51%, to close at 18 1/32 on volume of 4.1 million shares.

Gardner said in the report that, "Apple might fall short of its revised guidance for fourth-quarter earnings, citing rebates and price reductions of $200 to $500 on several models," according to Reuters.

The Nasdaq shed 145 points (-5.05%) to close on the low of the day for a new 52-week low of 2734 with volume of 1.89 billion shares. The Nasdaq is down 19% since the botched election, although earnings are clearly the greatest concern among analysts who have been downgrading tech stocks across the board.

The Philadelphia semiconductor index ($SOX) broke through all sorts of support levels for a new 52-week low. The AMEX Networking index is also tanking, down almost 50% from its high in September.

The biotech index ($BTK) is still up 110% this year and represents the last remaining paragon of tech strength, but its also well off its high

The Dow lost 38 points (-0.36%) to close at 10507 on volume of 1 billion shares.

The S&P 500 lost 12.88 points (-0.96%) to close at 1336.09.

In Apple related businesses: Akamai lost 4 7/8 to 30 3/8. Adobe dropped 4 1/32 to 64 25/32. IBM lost 1/4 to 98 3/16.

Salomonis Richard Gardner also wrote in his report on the PC industry that he doubts Dellis ability to meet its target of fourth-quarter 6% sequential revenue growth even with the downward revisions. Dell dipped 2 dollars to 22 7/16.

Compaqis VP for Sales, Peter Blackmore, said Salomonis negative spin on PC demand isnit the case for the Houston-based PC giant. "We are comfortable with our channel inventory levels and are seeing supply constraints ease during the quarter," he claimed. Compaq lost 1.80 to 23.01.

Gateway lost 1.51 to 31 dollars, like most PC stocks, Gateway is just a hairis breadth above its 52-week low.

The spin on Wall Street is that Microsoftis appeal of its antitrust conviction isnit likely to sidestep all of the proposed remedies. Justice Department spokeswoman Gina Talamona said, "The judgment is well supported by the evidence offered during a 78-day trial, including thousands of pages of Microsoftis own documents. We are confident in our case and look forward to presenting it to the Court of Appeals." Shares of Microsoft lost 3 11/16 to 67 dollars.

In economic news: Durable-goods orders fell 5.5% in October for the largest decline since July surprising economists who had expected only a 2.1% drop off in orders. Durable goods are a measure of items sold meant to last 3 or more years and include such big ticket items as aircraft, automobiles and appliances.

According to the Wall Street Journal, "The only strength was seen in the industrial machinery sector, which includes computer orders, where orders rose 1.8%. This category saw a 4.8% decline in September."

Meanwhile, the consumer confidence index, a measure of consumersi predisposition to part with their cash, slipped to 133.5 in November from 135.8 in October, its lowest level in a year, indicating consumers are worried about the direction of the economy. Observers had expected consumer confidence to rise.

Stay tune for the gross national product tomorrow morning, Wall Street is looking for a 2.5% rate of growth.

For full quotes on all the companies mentioned in this article, we have assembled this set of quotes at Yahoo! for your reference. For other stories regarding Appleis stock activity, visit our updated Apple Stock Watch Special Report.

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