NEW YORK – Technology stocks fell for a seventh straight session Monday as a new spate of profit warnings, most notably from Level 3 Communications, spooked investors.
Level 3, which provides high-speed communications services to businesses, cut its financial targets through 2002 and plans to eliminate 1,400 jobs, or 24 percent of its work force, due to the slowing economy and delayed purchases by customers. The shares fell nearly 22 percent, or $1.65, to $5.97.
``The earnings news seems to be more negative than positive, and there are still some other looming issues,'' said Peter Gottlieb, portfolio manager at First Albany Asset Management. ''There still doesn't seem to be a compelling reason to buy.''
The tech-heavy Nasdaq Composite Index lost 39.79 to close at 1988.64, below the psychologically important 2,000-point level. The current losing streak is the longest since December 2000.
Blue chips, meanwhile, rose on the strength of General Motors Corp. and United Technologies. The Dow Jones Industrial Average gained 21.74 to close at 10,645.38. The broader Standard & Poor's 500 Index lost 5.93 points.
General Motors climbed $2.16 to $61.51 -- a gain that accounted for almost two-thirds of the Dow's rise -- after an interview with top management published in the latest issue of financial newspaper Barron's boosted hopes the automaker can reverse decades of falling market share with better cars and trucks, and more emphasis on productivity.
No. 1 U.S. beef producer IBP Inc. surged $6.08 to $24.35 after a Delaware court said Friday that poultry producer Tyson Foods must stand by its agreement to buy IBP.
Tyson in March dropped its $3.2 billion bid for IBP, citing breaches of IBP's merger agreement but the court found that Tyson had all the information it needed to make an informed decision about buying IBP. Tyson slumped $2.01 to $9.37.
Car reservations systems supplier Galileo International Inc. rose $1.15 to $30.95. Cendant Corp., which owns the Avis rental car and Century 21 real estate broker brands, said it would buy Galileo for $33 a share. Cendant gained 57 cents at $19.02.
Stocks were pummeled last week amid the persistent drone of profit forecasts as Corporate America feels a pinch from the slowing economy, including warnings by telecommunications equipment maker Nortel Networks Corp., and JDS.
Those warnings, along with growing fears it may be a long road to recovery for the high-tech industry had dampened investors' appetite for technology shares, analysts said.
Still, some market strategists are seeing a silver lining.
``If the March quarter was any indication, then investors can take comfort, noting that nearly 80 percent of probable June quarter pre-announcements have already occurred,'' wrote CSFB strategist Tom Galvin in a note to clients.
He said there have been 768 second-quarter pre-announcements thus far and currently 65 percent of the total have been negative -- less than the 68 percent in the first quarter of this year.
Even more notable is that there are about 25 percent positive pre-announcements more than in the first quarter.
``This helps explain why the market has taken a licking and kept on ticking,'' he said.
Declining issues led advancers nearly 3 to 2 on the New York Stock Exchange. Volume came to nearly 1.10 billion shares, compared with the 1.57 billion Friday.
The Russell 2000 index slipped 4.60 at 490.53.
Overseas, Japan's Nikkei stock average slid 0.7 percent. Germany's DAX index fell 0.7 percent, Britain's FT-SE 100 lost 0.9 percent, and France's CAC-40 dropped 1.6 percent.
-- Reuters and the Associated Press contributed to this report.
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