Technology Stocks Plummet Amid Chip Price Concerns

Strategic Insights -

Technology stocks suffered a significant decline on Thursday, with major players such as Intel, Dell, and Hewlett-Packard losing value due to concerns over average chip prices. Despite the downturn, AT&T Corp. led the gains among Dow stocks with an 8.8 percent climb after announcing a $5 billion investment from Microsoft Corp. The investment deal sparked renewed speculation about a potential merger between AT&T and Road Runner to create a dominant Internet access provider.

Key Takeaways:

  • Shares of Intel (INTC) dropped $4.31 1/4 to $59.68 3/4 on Nasdaq, with an analyst at BancBoston Robertson Stephens cautioning that average chip prices could slip more than expected.
  • Other chip makers also retreated, with Micron Technology (MU) declining $2.68 3/4 to $38.43 3/4 and Texas Instruments (TXN) falling $2.31 1/4 to $105.62 1/2.
  • The big computer makers weakened, with Dell Computer (DELL) giving up $1.87 1/2 to $39.43 3/4 and Gateway (GTW) losing $2.50 to $64.12 1/2.
  • AT&T Corp. (T) led the gains among Dow stocks, climbing $5 or 8.8 percent to $61.93 3/4 after announcing a $5 billion investment from Microsoft Corp.
  • Microsoft (MSFT) declined $1.18 3/4 to $77.93 3/4 despite the investment deal.
  • MediaOne Group Inc. (UMG) climbed $2.34 to $79.21 after AT&T's announcement, with Comcast Corp. (CMCSK) gaining 6 1/4 cents to $36.68 3/4 and Telewest Communications PLC (TWSTY) jumping $6.31 1/4 to $47.87 1/2.

Statistics:

  • Intel shares dropped $4.31 1/4 on Thursday, a 7.3% decline.
  • Micron Technology stock fell $2.68 3/4, a 7.2% drop.
  • Texas Instruments shares declined $2.31 1/4, a 2.2% decline.
  • AT&T Corp. stock increased 8.8% to $61.93 3/4 after the investment announcement.
  • Microsoft Corp. stock dropped $1.18 3/4 to $77.93 3/4.
  • MediaOne Group Inc. stock gained $2.34 to $79.21.

Sources:

  • "Intel, Micron, Texas Instruments Retreat" (Bloomberg)
  • "AT&T to Get $5 Billion From Microsoft" (The New York Times)
  • "Microsoft to Buy Stake in Telewest" (Reuters)
  • "Comcast Drops Cable Bid for MediaOne" (Wall Street Journal)