After an opening surge, Nasdaq stocks retreated by midday Monday as investors moved to lock in profits from the market’s recent rally, which came even as signs pointed to further economic weakness.
A warning from Portal Software (Nasdaq: PRSF) of a quarterly loss added to the pressure.
The Nasdaq Composite Index was down 15.99 at 2,175.54 in early-afternoon trading, with Oracle (Nasdaq: ORCL) down 40 U.S. cents at $16.69 and Sun Microsystems off 22 cents at $19.53.
On Friday, stocks rose after a weak employment report from the government sparked hopes for another rate cut from the U.S. Federal Reserve.
Portal Sees Loss
Helping drag the index lower on Monday was Portal Software, down $3.08 at $6.20 after announcing that it expects lower revenue and a bigger loss for the quarter ended April 30th. The e-business software maker also said it will cut jobs and close facilities as it aims to cut costs 20 to 25 percent in the current quarter.
Tech bellwether Cisco Systems (Nasdaq: CSCO) was the most active Nasdaq issue, rising 31 cents to $19.95. The router maker announced an agreement with China Telecom, which runs China’s largest Internet service provider, that will bring faster, more reliable Internet service to the country.
Cisco is also scheduled to report results after the close of trading Tuesday. Analysts expect the company to earn 2 cents a share in the third quarter ended in April, down from 14 cents a year earlier.
The Standard & Poor’s 500 stock index was down 5.43 at 1,261.18 in early-afternoon trading, and the Dow Jones Industrial Average was down 42.33 at 10,908.91.
The E-Commerce Times Index of 15 prominent e-tailers was down more than 2 percent at midday, with Amazon.com (Nasdaq: AMZN) down 50 cents at $17.05, Barnesandnoble.com (Nasdaq: BNBN) 11 cents lower at $2.15, and eBay (Nasdaq: EBAY) off $1.62 at $50.73.
Proxicom Gains on New Bid
Internet consulting company Proxicom (Nasdaq: PXCM), meanwhile, gained $1.72 to $7.38 after receiving a $7.50-per-share buyout offer from the UK’s Dimension Data. The bid topped an earlier, $5.75-per-share offer from computer maker Compaq (NYSE: CPQ).
Compaq, meanwhile, fell 34 cents to $21.51. The company, which reportedly said that its Proxicom bid remains in effect, had hoped to use the acquisition to bolster its services revenue. Compaq will have an opportunity to increase its bid for Proxicom if the company decides the Dimension Data offer is superior.
Portal company Ask Jeeves (Nasdaq: ASKJ) picked up 17 cents to $2.41 after Compaq renewed its contract with the company for another three years.