U.S. tech stocks fall to new year lows on election, earns

U.S. stocks fell on Wednesday, with tech stocks carving out new lows for the year, as Wall Street again was spooked by the raging battle for the White House and worries about dwindling high-technology profit growth.

"The election is one thing and the fact that you are going to have some pretty soft numbers coming down the pike ... that's also weighing heavily on the market," said Harry Laubscher, an analyst at New England brokerage Tucker Anthony.

The technology-laced Nasdaq Composite Index slid 116.11 points, or 4.04 percent, to finish at 2,755.34. It was the Nasdaq's fifth straight session down - with 614 issues hitting new lows - and the composite index is now down 35 percent from its close on Sept. 1.

The blue-chip Dow Jones industrial average also got hammered: down 95.18 points, or 0.91 percent, to end at 10,399.32. The wider Standard & Poor's 500 Index lost 24.99 points, or 1.85 percent, to end at 1,322.36.

The market broke with a long-standing tradition of rallying in the days leading up to the Thanksgiving holiday on Thursday. It will have little time for a rebound this week because it will close early on Friday.

The Florida Supreme Court late Tuesday night allowed hand recounts of election ballots in the key state, a verdict that threatened to prolong the presidential ballot dispute that has cast a cloud over Wall Street for more than two weeks.

The Street also worried that a slowing pace of U.S. economic growth could bite into Corporate America's bottom line.

The latest confirmation of such fears came from Portal Software Inc., which forecast a slowdown in its growth rate. The Web software company's stock plunged $11-7/8 to $6-3/4 on Nasdaq, or nearly 64 percent.

"The expectations were really, really high for growth rates," said Paul Cox, manager of the Commerce Mid-Cap Fund at Commerce Bank. "The reports are coming in at high rates of growth. They're just not meeting those expectations."

Another company to land on the long list of corporate earnings shortfalls was Hormel Foods Corp., maker of SPAM luncheon meat and Dinty Moore beef stew. It said net income rose a lower-than-expected 2.2 percent due to a slowdown in grocery product sales. Its shares fell 3.68 percent, down 11/16 to close at $18 on the New York Stock Exchange.

About three shares fell for every one that rose on Nasdaq.

Software giant Oracle Corp., the most active stock on the Nasdaq, fell more than 6 percent, or $1-9/16 to $22-5/16. Other tech bellwethers tanked, including Web infrastructure firm Cisco Systems, telecommunications equipment maker Qualcomm Inc. and computing giant Sun Microsystems.

Internet companies did not escape the carnage. The American Stock Exchange's Internet Index shed 6.69 percent amid big drops in the shares of bellwethers like Yahoo! Inc., down $3-1/2 to $38-3/16 on Nasdaq, and America Online Inc., off $1.92 at $41.08 on the Big Board. Investors have sold these shares recently on worries of declining advertising revenues from dot-com companies.

"That's what the market is reflecting, the ability of a stock to earn its weight," said Doug Myers, vice president of equity trading at Wachovia Securities in Atlanta.

The Dow's slide was cushioned by a rebound in the shares of soft-drink giant Coca Cola Co., up $4-5/16 at $59-9/16. Coke late Tuesday scrapped efforts to buy Quaker Oats Co. for some $15 billion, a price analysts had said was too high. Quaker dropped $7-7/16 to $87.

But other blue-chip issues, like drugs and tobacco, were hit by concern that Republican candidate George W. Bush's lead in the election may be in doubt. Bush is seen as more favorable to such companies and is favored by some on the Street with his promise to bring in less government and regulation.

The major market indexes briefly pulled off their lows in the afternoon on news that Gore suffered a new blow when the key Florida county of Miami-Dade called off a hand count of votes, analysts said.

Yet more selling ensued late in the day as Gore's campaign said it would immediately seek to overturn that decision.

Tobacco giant Philip Morris Cos. cut part of its 7 percent loss to close at $35-13/16, down $1-5/8, and pharmaceutical maker Merck & Co. fell $1-5/16 to $90-11/16.

Losses in the once high-flying financial services stocks like J.P. Morgan & Co., down $3-7/16 to $138, also hit the Dow. The shares of Wall Street's largest firms, like Lehman Bros. Holdings Inc., fell for the fifth day in a row amid worries that weak stock markets will hurt their future profits. The Amex Broker Dealer Index slipped 4.37 percent.

"Given the volatile market conditions ... we'll definitely see lower trading revenues for most of the brokers," said Lauren Smith, analyst at Keefe, Bruyette & Woods, adding that the sector also was hit by the political uncertainty.

The dispute over Florida's 25 electoral votes - which will decide who will be America's next president - has cast a cloud over the market overall, and the court's decision gives the market no relief from what it hates the most - uncertainty.

Compounding the already chaotic political situation was news that Republican vice presidential candidate Dick Cheney suffered chest pains and had been admitted to a hospital on Wednesday. Cheney is expected to leave the hospital in a few days, his doctors said.

"All it does is create more uncertainty, in the election process, and that's not what we need right now," said James Volk, D.A. Davidson's co-director of institutional trade.

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