Adam Eisner, theWHIR.com
July 20, 2001 -- This week was a write-off for most major markets, particularly for the Nasdaq, which was stuck in the 2000 to 2100 range all week.
There wasn't one particular culprit to blame - rather, a slew of warnings and lousy earnings from the tech sector rained down on investors all week, causing little buying interest in the tech-heavy Nasdaq.
The biggest disappointment of the week came from former tech darling Nortel Networks, who announced Thursday after the bell that the company would post a net loss of $19.4 billion, or $6.08 a share, in the second quarter.
This came as a huge disappointment to investors, particularly when compared to the same results last year, when Nortel saw income of $745 million, or 26 cents.
Both numbers include one-time charges.
Microsoft did their part to drag the tech sector in to negative territory by announcing Friday that earnings next quarter would be lower than expected because of a lack in demand for personal computers. However, the software company did meet consensus estimates for its earnings. Sales for the quarter were $6.6 billion.
Exodus Communications, a company that has been hammered by the recent downturn, got a little bit of additional bad news on Thursday when the law firm of Stull, Stull & Brody announced it filed a class action complaint against the company. The complaint alleges that Exodus executives "devised a plan to stop the decline of the company's share price at a time when they knew Exodus' business was falling victim to both general economic slowdown and the dot-com bust," a release from the firm said.
Exodus was hit with another lawsuit Friday, this time from law firm Schiffrin & Barroway, who allege that Exodus issued "false and misleading statements concerning its business and financial condition."
Exodus shares are currently trading in the $1.10 to $1.50 range.
Computer hardware firm Dell, owners of Web hosting company DellHost.com, made an interesting announcement Wednesday when the company said it would introduce a line of network switches for servers geared at small and medium-sized business customers in the United States.
Network switches send information from a server or desktop directly to the computer for which it is intended without broadcasting it to all systems on the network. Dell says its line of network switches will be sold under the PowerConnect brand.
Wimbledon was no problem for Streaming media and connectivity specialists Navisite, who announced Tuesday that their network was able to handle more than 16,000 simultaneous users watching the men's tennis final.
NaviSite provided over three-quarters of a million streams during the two week 2001 Wimbledon Championships.
On Monday, Web hosting firm Data Return said Monday that it had forged a partnership with Vertigo Software to support the Visual Studio.NET CodeSwap Web site, vcodeswap.com.
CodeSwap is an add-in tool to the recently released beta 2 version of Visual Studio .NET, which provides a complete development environment for building XML Web services and applications on the Microsoft .NET framework.
And finally, EDS and Sun Microsystem announced a program Monday to jointly offer customers an array of on-demand IT offerings, including Web site management, data center outsourcing and ASP hosting services based on Sun's platform.
With earnings season in full swing again, it's difficult to anticipate which direction the market will swing next week. Let's just hope we're not hit with any more surprises close to the magnitude of Nortel's.
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