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Friday, 16 February, 2001, 22:38 GMT
Nasdaq leads stock slide
Nasdaq screens
The Nasdaq fell more than 4% in early trading
Technology stocks took a fresh battering after a spate of US profit warnings spread gloom across world financial markets.

In the US, the Nasdaq stock market and the Dow Jones index also reeled from news of attacks on Iraq.

The Nasdaq, home to most of America's largest and best known technology firms, closed down 127.53 points, or 5%, to 2,425.38.

The sell-off wiped out all of the Nasdaq's gains during 2001.

The losses put the index 1.8% lower on the week and year.

The Dow Jones industrial average lost 91.20 points to end at 10,799.82.

The Dow gained 0.1% on the week and is up about the same amount on the year.

The strikes on Iraq by the US and the UK were in retaliation for increased Iraqi activity to target Western aircraft in the southern no-fly zones.

Tech turmoil

The initial turmoil in tech stocks followed news that Canada's Nortel Networks, and Dell Computer and Hewlett-Packard of the US are all forecasting weaker growth.

Everything looks pretty gloomy out there today

A dealer in Japan

Nortel Networks lost nearly a third of its market value after it said it suffer losses this quarter, instead of the profit Wall Street expected.

Its shares fell 9.75, or 32.8%, to 20.00, while Dell lost 1.5 points to close at 23.50.

Hewlett-Packard slipped 3.22, or 8.9%, to 33.13, after reporting first-quarter earnings in line with estimates, but warning that it is "uncomfortable" with 2001 estimates.

Fresh economic data from the government also had an impact as inflation fears were reignited with news of a jump in prices at the wholesale level.

The US Department of Labor said producer prices rose a much-greater-than-expected 1.1%, far off analyst expectations of a slight 0.2% gain.

The report attributed the unexpected increase to rise in prices for fruits and vegetables, cigarettes, energy and cars.

Also sparking inflation fears was a report out of the US Commerce Department, which reported housing starts jumped 5.3% in January.

London discontent

Discontent with the telecom, technology and media sector also coloured the London market.

Technology stocks weighed down the FTSE 100 index as it hit its lowest levels for a month in afternoon trading.

Tech stocks hit markets around the world

The index closed down 109.6 points at 6088.3.

The Techmark 100 index of technology companies, also closed down 84.64 points at 2523.12.

The recent and disappointing flotation of Orange continued to haunt its rival telecom stocks, including Vodafone.

Vodafone was down from 216.25 to 204.5, its lowest level since the early part of 1999.

Orange was down to 561p from 573p.

Surprisingly, BT managed to buck the trend, rising 9.5p to 599.5p.

This was despite a threat by the ratings agency Standard & Poor's to cut the company's credit rating.

On the Continent, the news was not much better.

Frankfurt's blue-chip Dax index fell 2.31% to finish the day at 6,439.26 points.

In Paris, the Cac-40 closed below the 5,600-point mark for the first time in more than a year, falling 1.92% to finish at 5,595.13 points.

Alcatel, Vivendi and France Telecom were the session's most heavily traded shares, pulled lower by the Nortel warning, dealers said.

They added that the Nortel profit warning on Thursday prompted the bulk of the French market's losses.

Nortel hits its home market

In Canada, Nortel took its toll on the local market.

The Toronto Stock Exchange lost 567.50 points, or 6.3%, to 8,399.80 at 1538 GMT.

The falls come a day after Nortel issued a profit warning and announced additional job cuts in 2001.

Earlier in the day, Japan had already borne the brunt of poor sentiment in the US tech sector.

"Everything looks pretty gloomy out there today," one dealer said during the trading session.

"All the tech stocks are slipping."

Japanese firms similar to Nortel slipped, including Furukawa Electric, which lost 10% in trading.

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The Markets: 9:29 UK
FTSE 100 5760.40 -151.7
Dow Jones 11380.99 -119.7
Nasdaq 2243.78 -28.9
FTSE delayed by 15 mins, Dow and Nasdaq by 20 mins
See also:

16 Feb 01 | Business
Tech giants wield axe
15 Feb 01 | Business
Death of the PC?
15 Feb 01 | Business
The Limits of Growth?
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Cisco freezes hiring
02 Feb 01 | Business
Nasdaq falls 4%
07 Feb 01 | Business
Nasdaq turns thirty
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