Newspaper article St Louis Post-Dispatch (MO)

Tech Stocks Take Plunge with Microsoft

Newspaper article St Louis Post-Dispatch (MO)

Tech Stocks Take Plunge with Microsoft

Article excerpt

Stocks suffered their biggest setback in at least nine weeks Tuesday as a drop in Microsoft Corp. drove down technology shares.

One day after reaching a record 4736.29, the Dow Jones industrial average tumbled 50.01 points, its biggest drop since May 18. Technology shares - which for some investors are the stock market's new bellwether - slumped after Microsoft warned investors about growth prospects over the next year. The warning raised concern that other tech earnings could falter.

"When the leadership falters, everything follows," said Stefan Abrams, equity strategy director at Trust Company of the West in Los Angeles.

Microsoft fell 7 1/8 to 101 7/8. The decline came as two brokerages lowered their investment ratings soon after the software maker reported that fiscal fourth-quarter earnings from operations rose to 63 cents a share from 56 cents last year, beating analysts' forecast of 61 cents.

In a conference call with investors, Microsoft management was "concerned that the market is getting too effervescent about the outlook for the company and that a more cautious tone might be appropriate," said John Kim, chief investment officer at Life Insurance and Annuity Co. …

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