Markets hold up yet tech sector hit by slide

TECHNOLOGY shares slumped yesterday and pushed the Nasdaq down one per cent after Oracle reported results that cast doubts on the sector’s health, even as broader markets closed mostly flat in a thinly traded day.

Outside the Nasdaq, the market recovered from early losses as some recent fears over Europe faded. Traders tried to build momentum for a year-end rally and possibly erase the S&P 500’s 1.1 per cent losses so far in 2011.

After Tuesday’s close, Oracle Corp reported earnings and sales that missed expectations for the first time in a decade. The software giant joins a growing list of companies, including some of technology’s biggest and oldest names, whose results and outlooks have raised alarm bells about business conditions.

The stock plunged 12 per cent to $25.77 on heavy volume and was the top decliner in the Nasdaq 100. Shares of other tech companies also fell. IBM was the biggest drag on the Dow, down 3.1 per cent at $181.47. Cisco Systems lost 2.6 per cent to $17.92 at the close. The Philadelphia semiconductor index fell 1.2 per cent.

“Oracle is a tech story, but there’s concern it could be a broader economic story,” said Brad Sorensen of Charles Schwab in Denver.

The Dow Jones industrial average rose 4.16 points, or 0.03 per cent, to 12,107.74. The Standard & Poor’s 500 Index gained 2.42 points, or 0.19 per cent, to 1,243.72. The Nasdaq Composite Index slid 25.76 points, or 0.99 per cent, to 2,577.97.

For the year, the Dow is up 4.6 per cent while the Nasdaq is down 2.8 per cent.