Bellwether tech stocks Microsoft and eBay pulled the broader markets down Thursday, after reporting quarterly results that apparently gave tech investors a jolt, despite high hopes for a turnaround following the revealing of Apple's impressive quarterly results.
Microsoft shares fell 8.15 percent to US$17.80 a share in early-market trading, after it reported earnings that missed analysts' fiscal second-quarter earnings expectations before the markets opened.
eBay, meanwhile, dropped 11.37 percent to US$11.77 a share in early trading, after reporting weaker-than-expected fourth-quarter revenues after the markets closed Wednesday, and it lowered its outlook for the current quarter.
Both bellwether tech stocks were among the most actively traded on the Nasdaq exchange, which was down 3.05 percent to 1,461.06 in early trading. The Dow Jones Industrial Average was also down 2.45 percent to 8,026.43.
Apple, however, was one of the few most actively traded stocks on Nasdaq that was in the black, up 5.89 percent to US$87.71 a share.
Microsoft said it plans to cut 5,000 jobs over the next 18 months, starting by immediately slicing 1,400 of those jobs. Revenue for the quarter rose 2 percent, year over year, to US$16.6 billion, compared to a Wall Street expectation of US$17.1 billion, according to Thomson Reuters.
Net income fell 11 percent to US$4.17 billion, or 47 cents a share, in the quarter, compared with the year-ago quarter. Analysts, however, were expecting Microsoft to generate earnings of 49 cents a share, according to Thomson Reuters.
For Microsoft, which has a reputation of offering conservative earnings estimates to Wall Street and rarely missing its numbers, Thursday's announcements are particularly rare.
Microsoft further added to the uncertainty of the market by saying, "Due to the volatility of market conditions, going forward, Microsoft is no longer able to offer quantitative revenue and (earnings per share) guidance for the balance of this fiscal year."
The company's fiscal second quarter ended December 31, after a particularly bad holiday-shopping season.
This article was first published as a blog post on CNET News.com.
Play video
There are currently no comments for this post.