Nasdaq plunges as tech stocks drop on earnings and lower orders

 @ibtimes
on January 28 2010 12:41 PM

U.S. stocks were lower in mid-day trading on Thursday as technology stocks led the declines.

NASDAQ is down 52.95 points, or 2.38 percent, to trade at 2,168.44 at 12:30 pm in New York. The Dow Jones Industrial Average is only down 1.48 percent and the S&P 500 Index down 1.56 percent.

The Dow Jones U.S. Technology Index was down 3.49 percent.

Better than expected durable orders were reported by the U.S. government this morning before the market opened. New orders increased 0.9 percent for December while economists predicted a 0.5 percent increase, according to Bloomberg.

While orders for primary metals and machinery surged, the figure for computers and electronic products decreased by 3 percent. Orders for computers and related products alone fell 5.3 percent.

Disappointing unemployment claims figures were also released this morning. Claims were 470,000 for the week ending on January 23. Although the figure is down from the previous week, it missed estimates of 450,000, according to economists surveyed by Bloomberg.

The Nasdaq is weighed down by Apple (Nasdaq:AAPL), which is trading at $199.82, down 8.08 percent, after unveiling its highly anticipated iPad yesterday. Although the iPad was generally well received by analysts, Apple is trading below its opening price on Monday as the tech sector sank.

Apple reported stellar earnings on Monday. It received upgrades from analysts on Tuesday; Goldman Sachs issued a price target of $230; Deutsche Bank set a target of $250; Barclays expects a $265 price; and Credit Suisse raised its target to $275.

From its Monday opening of $202, Apple surged in the next three days on its earnings and in anticipation of the iPad, trading as high as $213 on Tuesday and $209 on Wednesday before erasing the gains today.

Telecommunications giant Qualcomm (Nasdaq:QCOM) reported earnings yesterday after the market closed. Although it beat earnings expectations, it reported weak revenues and issued a weak forecast for revenues and earnings. The stock was downgraded by ThinkEquity and Morgan Keegan today. It is trading down 14.41 percent on heavy selling.

Motorola (NYSE:MOT) is down 12.16 percent after it reported earnings this morning. Its earnings per share of $0.09 barely beat expectations of $0.08. Revenues, however, were down 5 percent year-on-year and missed expectations.

Tech companies that did not announce significant events are also weighed down by the sector. Yahoo (Nasdaq:YHOO), Cisco (Nasdaq:CSCO), and HP (NYSE:HPQ) and Google (Nasdaq:GOOG) are all down more than 2 percent. Microsoft (NASDAQ:MSFT) was down more than 1 percent.

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