Stockwatch daily: Sun casts a shadow over tech stocks

Tech giant's profit warning sends European bourses southward...

Tech giant's profit warning sends European bourses southward...

Stock markets opened decidedly down this morning as share traders digested a profit warning from tech giant Sun Microsystems, which it blamed on poor European sales. The FTSE 100 index was down 55 points or just under one per cent, with tech stocks hit even more heavily - down 1.5 per cent. European bourses also felt the pressure, with the German DAX down 1.1 per cent and the French CAC down 1.2 per cent. The day's big losers reads like a list of the UK's top technology firms. Telcos Vodafone, Marconi and Colt led the march southward, falling 2.1 per cent, 6.2 per cent and 5.9 per cent respectively. Software companies also felt the pinch, with Autonomy, down 4.9 per cent, Sage down four per cent and chipmaker ARM down 4.6 per cent. Techs are particularly worried by Sun's warning because of a feeling from many that the worst of the slowdown was over, and that the new harsher economic realities had already been factored in to the firm's estimates. Sun warned its profits could be hit by up to two-thirds in the current quarter. Euro stocks were also concerned because the main reason cited was a lack of demand in Europe. The Nasdaq fell 75 points, or 3.3 per cent yesterday, before Sun's after-hours warning.