E-Commerce Stock Watch: PC Sales Hurt the Street

Stocks are getting hammered today, because analysts are warning that computer sales at companies like industry leaders Compaq (NYSE: CPQ) and Dell (Nasdaq: DELL) may be weak.

PC demand could be down, but another issue is that e-commerce is actually cutting into margins right now. PC prices are going down rapidly, with some Web sites selling items at cost, and some Internet service providers and online stores actually giving away PCs to attract new customers. If PCs continue to be given away, the big companies are going to have to reevaluate their strategies. Stay tuned.

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