Warnings Make Rough Morning

Mar 02 2001

The Nasdaq lost more than 3 percent and the Dow almost 1 percent Friday morning, following Thursday evening's warnings from the database software giant Oracle and the local telco SBC that the companies would fail to meet quarterly earnings estimates.

By 11:52 a.m. EST Friday, the Nasdaq had lost 2.27 percent, or 49.58 points, to 2133.79. At 11:53 a.m., the Dow was off 0.3 percent, or 31.84 points, to 10418.3. At 12:01 p.m., the Standard 100, which is powered by Epoch Partners, was off 3.8 percent, or 17.49 points, to 442.72.

Late Thursday, the world's biggest maker of database software, Oracle, said it would earn 10 cents a share in the third quarter, down from the 12 cents analysts expected. The company said clients had delayed paying their accounts at the end of the quarter. By 11:41 a.m. Friday, Oracle had lost 18.42 percent, or $3.94, to $17.44.

Also late Thursday, SBC said it would earn 50 to 53 cents a share in the first quarter, rather than the 59 cents analysts had expected. The company added that it expects third- and fourth-quarter earnings to come in above 60 cents per share. By 9:55 a.m., SBC had lost 4.4 percent, or $2.00, to $43.50.

In retail, the Gap said late Thursday that it would earn 15 to 20 cents a share in the first quarter, short of analysts' expectations of 20 cents. By 11:38 a.m. Friday, the Gap had lost 8.17 percent, or $2.13, to $23.94.

On Friday, the Internet consulting firm Sapient said it would lay off 720 employees, or 20 percent of its staff, close its Sydney office and consolidate other offices in cities where it has more than one space. The company also said it will report revenues in the first quarter 20 percent lower than expected, and a loss per per diluted share of 3 to 5 cents, rather than a profit of 9 cents as expected. In midday trading, at 11:29 a.m. EST, Sapient was down 30.77 percent, or $4, at $9.

Fed Chief Alan Greenspan began to testify before the House Budget Committee on fiscal issues Friday morning, but he is not expected to make any market-moving comments. The market has already absorbed the effect of his congressional testimony Wednesday, which indicated that the Fed is unlikely to cut rates before its next meeting on March 20.