Tech stocks were showing a measure of strength in mid-afternoon trading Monday, as last week's sell-off gave way to a determined wave of bargain hunting. The broader market was mixed, with fears growing that share prices are in for a rough ride this quarter.
Meanwhile, traders were focusing on how a handful of new tie-ups will affect convergence of wireless communications and the Internet.
The Dow Jones Industrial Average shed 39.90 points to 9264.34, while the Nasdaq Composite Index was 11.14 higher at 2384.76. The S&P 500 fell 0.51 to 1238.89.
The bears were rattling their cage after Ralph Acampora, chief technical analyst at Prudential Securities, issued a report saying that share prices could decline as much as 10 percent in the near future. He's not the first to forecast a setback for stocks this year, but Acampora is counted among those elite few analysts with the clout to single-handedly move the market, so his prediction carries that much more weight, especially for jittery investors seeking any excuse to dump shares.
For its part, the wireless communications industry has looked at the future, and it sees the Internet. This was clear as Motorola said it was teaming up with Cisco Systems to jointly invest about US$1 billion over the next few years to deliver Net access via portable phones and other such gadgets. Motorola (MOT) advanced $1.44 to $67.88, while Cisco (CSCO) was down 88 cents at $100.38.
"The big players are planning to make the Internet ubiquitous," said William Kurtz, an analyst with HG Wellington & Co. "This convergence will make the Internet the communications medium of choice."
Not to be left behind, Nextel Communications (NXTL) joined hands with Netscape Communications (NSCP) to offer Net access and other data services to mobile phone customers. Nextel gained $1.91 to $32.19, while Netscape, now being acquired by America Online, was $1.56 lower at $67.88.
Judging by the performance of the above stocks, it appears that investors have higher hopes for wireless firms reaching out to the Net than for Net outfits breaking free of their established terrestrial networks. It remains to be seen, for example, how big the market will be for wireless Net access, and how much such a convenience will cost users.
A record 163 million wireless phones were sold worldwide last year, up more than 50 percent from the year before, according to market researcher Dataquest. Finland's Nokia was the leading provider, stealing top-spot honors from Motorola.
Anyway, the Net is still suffering from growing pains. Online broker Ameritrade Holding (AMTD) was the latest victim as its system crashed for almost a half-hour in the morning. Last week, rival ETrade Group (EGRP) saw its service go kaput three days in a row.
Investors, while somewhat forgiving of ETrade's plight last week, were losing patience as the snafus spread. Ameritrade dropped 13 percent to $83.56, and ETrade was down $1.06 at $47.88. Even the boutique brokers that have recently been so beloved by traders took a beating, with JB Oxford (JBOH) tumbling 26 percent to $8.75 and Siebert Financial (SIEB) down 16 percent at $29.63.
In tech, Microsoft (MSFT) rose $2.31 to $162.31 on a report in the Seattle Times that Redmond is planning a sweeping reorganization that will increase the company's focus on the Net. Separately, Microsoft also staked a claim to the wireless-convergence movement by climbing into the sack with British Telecommunications to develop mobile Net services outside North America.
Today's merger: Computer Associates International (CA) is buying Computer Management Sciences (CMSX) for $435 million. The all-cash deal represents Computer Associates' latest bid to boost its business-services operations amid a slowdown in sales for enterprise software. Computer Associates inched just 25 cents higher to $46.56, while Computer Management Sciences jumped 17 percent to $27.56.
Lastly, a company called Free-PC.com pops up with an offer to give away a bunch of computers in return for recipients sharing data about themselves and accepting a barrage of online advertising. Is this a serious threat to the PC power structure?
Apparently not. Dell Computer (DELL) advanced $1.31 to $101.75, and Compaq Computer (CPQ) was up 81 cents at $44.44. Apple Computer (AAPL) gained $1 to $37.31.
