Research in Motion downgraded by several analysts

Techs dropping while rest of markets hold tight

By: IE Staff
April 12, 2000 April 12, 2000
11:46

By James Langton

(April 12 – 13:00 ET) – Tech stocks are getting hammered again this morning, with losses deepening at midday. The TSE 300 Composite Index is down 192 points to 9165, a 2% drop. Volume is average at 83 million shares, only about 4:3 in favour of sellers. Declines, though are outnumbering advances almost 3:2.

Despite all the bloodletting on the street, the selling is fairly well concentrated in the tech sector. The industrials are down 5.5%, and the utilities are off more than 4%. Software stocks are off almost 6%, too. But apart from these disaster areas, the rest of the TSE is holding up well.

The TSE 300 actually opened up on strength in the banks. The financials are up almost 3% on the day. Conglomerates and the rock, tree and energy stocks are all up.

That said, the tech losses are simply overwhelming. Research in Motion is the dog of the day, plunging 38% on 3.8 million shares, after CSFB, Scotia Capital and Bank of America downgraded its estimated 2001 EPS to 15¢ a share from 35¢, dropping revenue estimates by about $30 million, too. Guilty by associations are Sierra Wireless, Certicom and Descartes Systems, all off almost 20%. Market giant Nortel Networks is down 6%.

In the face of these massive losses the old economy is being led by the financials. All the banks are up strongly, as well as the insurers too, led by Sun Life. Bowater and Weyerhaueser have the paper group up. The auto group is also having a great day, led by Magna, up almost 10%. There are also strong gains in GM and DaimlerChrysler.

In New York the story’s the same. The Dow is up 69 points to 11356. The Nasdaq has dropped 159 points to 3896. It has been down as much as 25% from its February high, slipping below 4000 for the first time in months. A downgrade on the chip sector from Goldman Sachs is hurting the whole group. The S&P has slipped 14 points to 1486.

The CDNX is joining the selloff, too. It is down 148 points to 3877 on 31 million shares. Techs are off 6%. Aquarius Coatings is the hottest stock, up 117% on 6.5 million shares.