Brazil's economic uncertainties continued to weigh heavily on Wall Street in mid-afternoon trading Thursday. Stocks were down, although tech and Internet shares were struggling mightily to regain higher ground.
In Washington, an impeachment trial for the president of the United States got under way, but nobody really seemed to care all that much.
The Dow Jones Industrial Average fell 139.29 points to 9210.27, and the S&P 500 was 8.89 lower at 1225.51. The Nasdaq Composite Index shed 14.24 to 2302.57, and the Wired Index was down 7.31 at 597.12.
Despite mixed reviews by industry analysts, Net stocks were doing their damnedest to resist selling pressure. Enthusiasm for the .com crowd was bolstered in part by the latest in a series of estimates -- collect them all -- for how much US shoppers spent online this past holiday season. A survey by Marketing Corp. of America places the total amount at US$8.2 billion, with women spending about twice as much as men.
"Internet stocks have done extremely well," said Rao Chalasani, chief investment strategist at Everen Securities. "It was time for a sensible correction."
Sensible or not, Yahoo (YHOO) and Lycos (LCOS) were both lower after Deutsche Bank Securities downgraded its ratings for the portals. Analyst Alan Braverman said current valuations don't reflect actual business fundamentals -- like that's news -- but he still remains upbeat about each outfit's long-term prospects. (Legal fine print: Lycos is in the process of acquiring Wired News.)
In a sure sign that Net shares retain an undeniable mystique for traders, especially those of the day variety, a no-neck firm called Interiors (INTXL) saw its stock skyrocket $1.19, or 211 percent, to $1.75 after the maker of decorative accessories said it will launch an interiors.com site and open an outlet in Yahoo's cyber-mall.
Similarly, Sunglass Hut International (RAYS) advanced $1.88, or 25 percent, to $9.25 after announcing its acquisition of a couple of electronic retailers, shades.com and SwissArmyDepot.com. Morgan Stanley Dean Witter boosted its rating for Sunglass Hut to "strong buy" from "neutral."
In tech, Apple Computer (AAPL) fell $3.25 to $43.25 on worries that the company won't be able to sustain its holiday-sales momentum into the next quarter. On Wednesday, Apple reported better-than-expected quarterly profit of 78 cents a share, excluding one-time gains. It was the fifth consecutive money-making quarter for the rejuvenated firm.
Chipmaker Advanced Micro Devices (AMD) tumbled $4.75, or 17 percent, to $23 after revealing that its own quarterly earnings came up short of analysts' expectations. The company saw profit of 15 cents a diluted share, whereas the Street was looking for at least 19 cents. Rival Intel (INTC) was $4.25 lower at $134.75.
Cisco Systems (CSCO) climbed $1.63 to $97.50 as Morgan Stanley Dean Witter raised its 12-month price target for the company's stock to $120. Dell Computer (DELL) rose $1.13 to $78.19, while Microsoft (MSFT) dropped 31 cents to $143.50.
Lastly, Golden Books Family Entertainment (GBFE), a publisher of kids' books, surged $1.06, or 142 percent, to $1.81 after The New York Times reported that Disney (DIS) had bought a stake in the firm. Neither company confirmed the story, but seeing as Golden Books opened trading at less than a buck a share, why take chances?
