Technology Stocks Drop in Morning Trading

Technology stocks tumbled Monday as investors sought direction in the first day of trading since last week’s terrorist attacks on the World Trade Center.

The Nasdaq Composite Index dropped 95.40 to 1600 in morning trading. The Dow Jones Industrial Average fell 474.19 to 9131.32.

The Federal Reserve cut interest rates by a half point before the market open Monday, bringing its key benchmark down to nine-year low 3% in a move to boost the economy. The central bank said that although last week’s terrorist attack could damp spending, it believes the long-term prospects for the economy remain favorable (see article).

Some companies, including Cisco Systems, said they will begin buying back their own shares Monday as part of a wide-ranging effort to help boost the reopening of the stock markets. U.S. stock markets have been closed since Tuesday’s events forced Wall Street to a screeching halt, the longest break the markets have had since before World War II. Shares of Cisco slipped 77 cents to $13.70 in early trading Monday.

Oracle fell 80 cents to $10.66 on Nasdaq. The software maker said Thursday that it met diminished expectations with a slight rise in quarterly net income in the first earnings announcement by a major U.S. firm after Tuesday’s attacks.
Other companies announced news.

Vodafone dropped $1.18 to $18.80 on the New York Stock Exchange. The telecom company is in talks to increase its stake in Japan Telecom, Japan’s third-largest telecom, by 21.7% in a deal valued at $2 billion.

Verizon lost 45 cents to $45.85 on the Big Board. The company said it restored phone service to the New York Stock Exchange and major brokerage firms and that the system is ready for the resumption of stock trading.

WebMD fell 23 cents to $3.83 on Nasdaq. The online health site said “delays” and “difficulties” related to last week’s terrorist attacks could affect its third-quarter revenue. The company also said it may record a noncash charge in the quarter. Additionally, WebMD said it has terminated its agreement with Microsoft in which the software giant would have provided the technology for WebMD’s hand-held computer system. Microsoft fell $2.78 to $54.80 on Nasdaq.

Teradyne tumbled $2.83, or 10%, to $25.75 on the Big Board. The maker of semiconductor testing equipment said it cut 1,000 jobs and will reduce salaries of its higher-paid workers. The Boston technology company said it expects to report a loss that is at the low end of previous predictions.

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