Technology stocks started the week on a sour note, with semiconductor sharesleading the Nasdaq Composite Index lower Monday in a continuation of last week’sdecline.
At midday, the Nasdaq had fallen 33.52 to 2,626.98. Cisco Systems (Nasdaq:CSCO) led the drop, falling US$1.56 to $33.94. The company is scheduled toreport quarterly results after the close of trading Tuesday.
Semiconductor shares were lower after an industry trade group reported thatchip sales declined in January. The Semiconductor Industry Association (SIA) said that worldwide sales for the month totaled $17.9 billion, down 2.1 percent fromNovember.
While the SIA said the figures were “in line with normal year-end patterns,”it warned that an “inventory overhang” makes it unlikely sales will reachthe 22 percent year-over-year growth forecast the SIA has predicted.
Among chipmakers, Intel Corp. (Nasdaq: INTC) was $1.44 lower at $34.25,Texas Instruments (NYSE: TXN) was down $2.01 at $41.07, and Motorola (NYSE:MOT) was down 56 cents at $20.77.
Economic Slowdown
Meanwhile, the National Association of Purchasing Management provided freshevidence of a broad-based economic slowdown.
In its monthly report onnon-manufacturing business, the group said the pace of growth fornon-manufacturing companies slowed sharply in January.
The NAPM Non-Manufacturing Business Activity Index “just barely continuedits long-term growth trend, as growth was much slower than in December,”said Ralph G. Kauffman, chair of the NAPM committee that compiles the index.
Purchasing ‘Discomfort’
New orders and order backlogs were lower, exports and employment rose moreslowly than a month earlier, and purchasing executives “felt a greaterdegree of discomfort with the level of inventories in January than they didin December,” Kauffman said.
Overall, the NAPM’s non-manufacturing index fell 11 percentage points from December, to 50.1 percent.
Last week, news that the NAPM’s index of manufacturing activity fell to its lowest level since the last recession contributed to a decline in thestock market. The association surveys its members, purchasing executives atU.S. corporations, about their business activities and expectations.
E-Commerce Still Sinking
The E-Commerce Times Stock Index,meanwhile, was down 2.56 percent on the day, led by declines in Travelocity(Nasdaq: TVLY) and Webvan (Nasdaq: WBVN).
Another e-commerce drop was seen at business-to-business (B2B) company PurchasePro (Nasdaq: PPRO). PurchasePro stock had fallen $4.12 at $21, after an article in Barron’s magazine questioned the company’saccounting practices and reportedly said its management was inexperienced. The companyissued a statement refuting the article.
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