Major U.S. stock indexes were lower at midday Friday, as more technology companies weighed in with warnings of missed expectations for the current quarter.
Most stocks, however, were off their morning lows by early afternoon.
At midday, the Nasdaq Composite Index was down 49.12 at 2,134.16, theStandard & Poor’s 500 stock index was down 8.30 at 1,232.93, and the DowJones Industrial Average was down 37.35 at 10,412.79.
An early plunge was sparked by news that two big companies — software makerOracle (Nasdaq: ORCL) and telephone service company SBC Communications (NYSE:SBC) — will report quarterly results that fall short of analyst expectations. Oracle was down US$3.10 at $17.42, and SBC was down $1.97 at $43.53.
Oracle said that earnings per share for the third quarter ended February 28th will come in at about 10 cents, 2 cents below analyst expectations, because ofa slowdown in the U.S. economy.
A “substantial number” of customers decidedto defer spending on information technology because of a weak economy, saidchief executive officer Larry Ellison.
SBC blamed costs associated with expansion and upgrades for its troubles.Earnings per share for the quarter ending in March will be 50 to 53 centsper share, below the 59 cents expected by analysts, the company said.
However, SBC is sticking with its forecast for full-year growth.
Because Federal Reserve Chairman Alan Greenspan, in an appearance before the HouseBudget Committee on Friday, did not make any promises about cutting interestrates, corporate news is taking center stage on Wall Street.
Greenspan told the committee that the Fed was not too slow in lowering rates.
“Had we moved too soon, we would have altered the path of adjustment and conceivably created a higher level of economic activity than we are currently seeing, inducing far greater imbalances and a far greater correction of adjustment,” Greenspan said.
Software, E-Biz Drops
Reports of analyst downgrades sparked by Oracle’s news also put pressure ontechnology stocks.
BEA Systems (Nasdaq: BEAS), i2 Technologies (Nasdaq: ITWO) and Siebel Systems (Nasdaq: SEBL) were on a list of 14 companiesreportedly downgraded to neutral at Morgan Stanley. Ariba (Nasdaq: ARBA) wasreported to have been lowered by Goldman Sachs.
The E-Commerce Times StockIndex was down 8.77 percent at midday, led by drops in Webvan (Nasdaq:WBVN), Drugstore.com (Nasdaq: DSCM) and eBay (Nasdaq: EBAY).
eBay, down $1.06 at $36.44, said it settled a long-runninglawsuit against auction portal Bidder’s Edge. An eBay spokesperson calledthe settlement a “victory” for the Internet auction company.