NEW YORK – Shares of technology companies took a beating on Monday as the House of Representatives failed to pass a bailout plan for the financial sector.
When the dust settled at the end of the trading day on Monday, the Dow Jones index was down more than 777.68, a record point decline, with the index down nearly 7 percent from Friday. The CNET Tech index closed Monday at 1375.64, a one-day drop of more than 107 points, or nearly 7.25 percent.
The S&P 500 Index dropped 106.46 points, or 8.8 percent, to close at 1,106.55, while the tech-heavy Nasdaq Composite Index dropped 199.61 points, or more than 9 percent, to close at 1,983.73–the first time it dipped below 2,000 since 2005.
Among the hardest hit individual stocks was Apple, which also was hit with a pair of analyst downgrades. Shares of the Mac and iPhone maker closed at $105.26, down $22.98 or almost 18 percent. Also hard-hit were the stocks of chipmaker AMD, which was down nearly 17 percent percent, while Google dropped more than 11 percent to close at $381.
Bellwethers such as Hewlett-Packard, Intel, and Microsoft were all off more than 5 percent. One of the narrowest percentage losses was IBM, which was still off more than 4 percent, to $114.46
Longtime technology analyst Ashok Kumar, of brokerage Collins Stewart, said the macroeconomic concerns will weigh heavily on the technology industry, which is still perceived as a discretionary expenditure for both consumers and businesses.
“Until these clouds clear everybody is going to be in a bunker mentality,” he said. “The hope is that six months out or nine months out the clouds have cleared…. but near term obviously the outlook is extremely cloudy.”
Popular sentiment on Wall Street, he said, is that the government’s inaction amounts to “rearranging the deck chairs on the Titanic.”
Microsoft, Google, Intel and Yahoo representatives all declined to comment on the market plunge. An Apple representative was not immediately available for comment.
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