Stock Watch: IBM Falls Hard on Y2K Warning

The Y2K crisis has caught up with IBM (NYSE: IBM). Shares of the computer manufacturer tumbled nearly 15 percent on Thursday, falling 15-7/8 to 91-1/8 after the company warned that its profits for the fourth quarter of 1999 and first quarter of 2000 will be significantly lower than expected. This is largely because Y2K concerns have led other companies to reduce spending, which has slowed down IBM’s hardware sales.

There is a lot of concern surrounding IBM, with numerous analysts downgrading the stock, but the anxiety is not across the board in the technology sector. Other computer and technology stocks showed signs of strength on Thursday. Most notably, shares of Gateway Computer (Nasdaq: GTW) rocketed almost 20 percent,gaining 10-3/16 to 62-3/16, one day after America Online announced it was investing $800 million in the company.

IBM trades on the New York Stock Exchange, which was down nearly 95 points on Thursday, but the technology-laden Nasdaq actually closed in positive territory. Yes, Y2K is a concern, but not for everybody, it seems.

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