Earnings contractions darken the third quarter: More pre-announcements impacted the tech sector in overnight trading. By 11:54 am ET, the Nasdaq was down 0.99 percent, or 34.98, to 3488.12, and TheStreet.com Inc. (TSCM) Internet index fell 2.06 percent, or 13.50, to 640.89. The Dow lost 0.32 percent, or 34.04, to 10750.44.
According to the U.S. Department of Labor, first-time claims for unemployment benefits rose 10,000 last week, to 299,000. The number of jobless claims continues to indicate a tight labor market, though it is relaxing relative to first- and second-quarter levels.
Closures and Missed Earnings
Dell Computer Corp. (DELL) fell $2.31, or 8.20 percent, to $25.88 after it announced that its quarterly revenue will miss revenue estimates by 3 percent because of weak European sales. The stock dropped 9 percent in after-hours trading on Island ECN after the announcement.
Priceline.com Inc. fell $2.75, or 29.33 percent, to $6.62 after its licensee, Priceline WebHouse Club, announced plans to close up shop in the next three months. Priceline WebHouse Club had made a go of selling groceries and gasoline online but has attracted a great deal of ire of late with customers either unable to cash in their bids or dissatisfied with their purchases. Perfect Yardsale, another Priceline licensee, likewise announced plans to retire. Priceline.com will record a non-cash loss for the carrying value of its investment in both entities.
On a More Upbeat Note
Micron Technology Inc. (MU) posted net income after Wednesday's close that beat analysts' estimates. The semiconductor component maker's stock fell Thursday morning $4.88, or 10.39 percent, to $42.06 in profit-taking after an overnight rally.
RSA Security Inc. (RSAS) rose $6.75, or 17.09 percent, to $46.25 after announcing it expects third-quarter earnings of 24 cents a share, beating analysts' estimates by a penny. The company also announced plans to repurchase up to 4 million shares of its own stock within the next 12 months for employee stock-option plans.
America Online Inc. (AOLA) rose $2.85, or 4.86 percent, to $61.50 after Ing Barings analyst Youssef Squali upgraded the stock to a "strong buy" from a "buy."
Lehman Brothers Inc. cut its revenue forecasts for Israeli Internet service provider Internet Gold due to increased competition in the Israeli ISP market. The stock, which trades on the Nasdaq, fell 50 cents, or 9.30 percent, to $4.88.