Dow drubbed: Days like this make my 401(k) ache. The only good news is that I don’t own any stock – at least directly – in semiconductor companies.
In a volatile week already, the Wall Street roller-coaster went on a wild plunge today, suffering one of its worst days this year. After dropping nearly 450 points at one stage, the Dow Jones industrial average rebounded a bit to close at 13,473.57. Still, that was a drop of about 310 points, or 2 percent, making the day a real downer.
Especially if you own stock in a chip company. Micrel led the losers, dropping 22 percent. but it was also tough on Mattson Technology (-10 percent), AMD (-5 percent), Applied Micro Circuits and Actel (-5 percent), Pericom Semiconductor (-4 percent) and Intel (-2 percent) – well, you get the idea. On a macro level, the Philadelphia Semiconductor Index fell 3 percent, its biggest drop since Feb. 27.
All told, only 38 of Silicon Valley’s 150 biggest stocks eked out a gain, led by Netflix, which rebounded 7 percent as archrival Blockbuster reported a loss stemming from its price war with Los Gatos-based Netflix. (For details about the big indexes, read to the bottom.)
AMD did manage to bring some smiles to investors’ faces, though, when it said its goal of breaking even by year’s end is “aspirational.”
Apple shines: One stock that broke the trend was the social trend-setter itself: Apple. Its stock climbed 6 percent to close at $146 in the wake of Wednesday’s earnings news, which reflected record sales of Macintosh computers but stagnant sales of iPods and uncertain early sales reports on the hyped iPhone.
Despite the mixed signals, analysts at Deutsche Bank Securities and Piper Jaffray confidently raised their forecasts today, predicting the stock will hit $200 and $211, respectively.
Mobile `milestone’: Two titans of technology – Google and Sprint Nextel – announced today that they will team up to develop a portal to enable consumers to search the Internet and tie into social networks over cell phones and mobile devices.
Sprint said the deal is a “milestone” in its $3 billion plan to build out a so-called WiMax network, a supercharged version of the WiFi networks that enable Web surfers to connect to the Internet at Starbucks and other so-called hotspots. The big difference is that WiMax has a range of up to 10 miles, while WiFi is limited to about 150 feet.
Sprint’s goal is to blanket entire cities with WiMax coverage – and the deal with Google could give consumers something to use on such a network. For starters, that could include high-speed Web searches, music and video streaming and applications such as GMail.
Risky business: Days after Wells Fargo, Countrywide and Washington Mutual killed several subprime mortgages popular with spotty borrowers, Wells Fargo let another shoe drop: It will no longer issue subprime loans through brokers.
The San Francisco bank said it’s shutting down its subprime wholesale offices in Baton Rouge, La., and Des Moines, Iowa, and will lay off up to 237 workers.
Critics have raised questions about the role of mortgage brokers in the subprime crisis, citing evidence that some fudged documents and sculpted borrowers’ credit information in order to close loans and pocket fees.
Wells is among the biggest subprime lenders in the nation, but the wholesale division accounted for only 1.6 percent of the bank’s $398 billion in mortgage loans last year. That has insulated it from the crisis that has forced more than two dozen subprime lenders to shut down or seek bankruptcy as defaults and foreclosures on exotic loans have jumped.
Meanwhile, JPMorgan Chase, the nation’s third-largest bank, said it will stop selling loans that initially guarantee fixed-rate payments for less than five years. And Moody’s Economy.com projected a big jump in mortgage defaults that will cost investors $100 billion to $125 billion in losses.
Sigh on if you dream to be a scion: Hasso Plattner – co-founder of business software giant SAP and an co-owner of the San Jose Sharks – wants to build a house. A very, very big house.
He has submitted plans to build a 16,500-square-foot, three-story Meditteranean-style home in the hills of San Martin south of San Jose. Such digs are big even by the standards of what real estate reporter Sue McAllister calls the “ultraluxe” Cordevalle Vineyard Estates subdivision.
If Plattner gets his way – there’s a public hearing next Thursday – his home will feature “a plethora of balconies, differing window and door openings, arches, decks and colonnades for design variety.”
And maybe some ingress and egress for the richest.
Silicon Valley tech stocks:
Big-name gainers: Netflix and Apple.
Big-name losers: Sanmina (-9 percent); Synnex (-6%), AMD, Sun Microsystems and Franklin Resources (-5%); and Oracle and Yahoo (-3%).
The tech-heavy Nasdaq composite index: Down 48.83, or 1.84 percent, to 2,599.34.
The blue-chip Dow Jones industrial average: Down 311.50, or 2.26 percent, to 13,473.57.
And the Standard & Poor’s 500 index: Down 35.43, or 2.33 percent, to 1,482.66.
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, the Associated Press, Bloomberg News and other wire services.