NEW YORK -- A fierce sell-off in technology shares sent stock indexes spinning lower yesterday, handing the technology-heavy Nasdaq composite, which fell 83.34 points to 2410.07, the third-biggest point loss in its history.
Intel Corp. and Advanced Micro Devices Inc. led computer-related shares lower amid signs that their price war on microprocessors are hurting their profit. Intel, the No. 1 chip maker, dropped $8.5625, to $130.125, after Merrill Lynch & Co. analyst Thomas Kurlak lowered his earnings estimate for this year to $4.45 from $4.60 because of lower chip prices.
Kurlak said Intel's Celeron 400 megahertz chip is selling for $90, down from a list price of $158, which directly challenges AMD's pricing on K6-2 chips.
AMD said it may lose money in the first quarter because of the price competition from Intel. AMD fell $2.0625, to $18.875, before trading was halted for the announcement.
Cisco Systems Inc. slid $5.875, to $105.25; Microsoft Corp. lost $7.75, to $159.0625; and Dell Computer Corp. fell $5.50, to $102.375. Cisco trades at 71 times estimated 1999 earnings, Microsoft trades at 64 times and Dell's price-to-earnings ratio is 97. Intel's P/E is 28.
The Dow Jones industrial average fell 62.31, to 9,304.50. The blue-chip index swung widely during the day, falling 91 points in the morning, then heading up 31 before retreating a second time.
Dow component and technology leader International Business Machines Corp. lost $5.6875, to $169.625, and was responsible for almost 24 points of the Dow's loss.
The Standard & Poor's 500 index sank 23.58, or 1.9 percent, to 1,248.49.
The Russell 2,000 index of small-cap stocks sank 5.95, to 417.79; the Wilshire 5,000 index plunged 193.05, to 11,495.96; the American Stock Exchange composite index skidded 6.15, to 707.12; and the S&P; 400 midcap index dropped 6.60, to 372.25.
The Sun-Bloomberg Maryland index lost 0.46 to 189.74.
Decliners beat advancers 9 to 5 on the New York Stock Exchange. Volume was 854 million shares on the Big Board, off slightly from Wednesday's pace.
Copper producers' stocks gained after Morgan Stanley Dean Witter & Co. analyst Wayne Atwell raised his ratings on Phelps Dodge Corp., Cyprus Amax Minerals Co. and Asarco Inc. Phelps Dodge gained $4.50, to $47.50; Cyprus rose $1.3125, to $11.0625; and Asarco rallied $1.50, to $15.0625. The price of copper fell Monday to a 12-year low.
Minnesota Mining & Manufacturing Co., maker of more than 50,000 industrial and consumer products, gained $1.875, to $76.50.
International Paper Co., North America's largest paper company, rose $2.625, to $44.1875, after winning U.S. antitrust clearance for its $6.5 billion purchase of rival Union Camp Corp. Shareholders are scheduled to vote on the plan next month.
E Trade Group Inc., the No. 3 online brokerage, which crashed again yesterday for the second time in two days, fell $1.75, to $53.50, bringing its decline since Monday to 14 percent. Ameritrade Holding Corp., the No. 6 Web broker, fell $17.8125, to $110.75, and National Discount Brokers Inc., the No. 10 online broker, fell $7.625, to $30.
J. B. Oxford Holdings Inc. escaped the decline. Its shares rose $3.875, to $15.875, and have tripled in two days, although the firm said last week that it is under investigation by the Securities and Exchange Commission and a federal grand jury for possible market manipulation.
Pfizer Inc. dropped $2.1875, to $131.5625, after a Chinese maker of herbal medicines won approval for a cheaper rival to Viagra, Pfizer's anti-impotence drug, the Financial Times reported.
Avon Products Inc., the world's largest direct seller of cosmetics and beauty products, rose $4.1875, to $43.50, after reporting fourth-quarter earnings rose 27 percent as it cut costs and increased sales in the United States, Brazil and Europe.
Boron, LePore & Associates Inc. fell $12.625, to $16.125, after the marketing company for the drug industry said its chief operating officer will leave. The company also reported fourth-quarter net income of 24 cents a share, a penny below estimates.
In overseas trading, the Nikkei 225 index in Tokyo dropped 0.53 percent. The CAC-40 in Paris lost 0.51 percent, and the DAX in Frankfurt, Germany, ended 0.15 percent lower. The FT-SE 100 index in London closed nearly flat.
Pub Date: 2/05/99