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Correction batters Canadian technology stocks More Technology News
OTTAWA, March 15 (Reuters) - More air escaped the overheated technology sector ballon on Wednesday as newly cautious investors delivered a drubbing to the red-hot Canadian stocks.
Technology firms dominated the list of net losses on the Toronto Stock Exchange, with downturns recorded in a spectrum of sectors ranging from semiconductors to software.
The market is rattled by signs that a long-standing technology streak may be starting to stall.
"There has been a rotational take 'em out and shoot 'em style correction in a lot of these stocks," said Gerald Vincent, vice-president of Davis-Rea Investment Counsel.
"We're probably just now starting to see unbridled enthusiasm turn to somewhat of a suspension of enthusiasm -- and there's no reason to presume that we won't see absolute panic selling in a lot of them," he said.
Some of the market's hottest performers -- wireless, biotechnology and e-commerce firms -- suffered the worst abuse on Wednesday.
Software developer 724 Solutions Inc. (SVN-T) led net losses on the Toronto Stock Exchange, slipping nearly 13 percent, or C$34.00, to trade at C$228.00.
Fuel cell developer Ballard Power Systems Inc. (BLD-T) followed with a loss of nearly 16 percent, or C$24.75, to trade at C$131.75.
"These things don't go straight up for ever -- once in a while you're going to have to see them bend a little bit in the breeze," said Fred Ketchen, senior vice-president and director of equity trading at ScotiaMcLeod Inc.
"I think it's overdue -- a correction within the technology sector -- at least a return to a little bit more acceptable prices."
Companies reporting positive news weren't spared either.
Market darling Research In Motion Ltd. (RIM-T) , (RIMM-O) lost C$10.00 to trade at C$178.00 after announcing on Wednesday it would supply its wireless e-mail pagers to Rogers AT&T Wireless.
Blue-chip technology firms also took a dent on the Toronto bourse.
JDS Uniphase Corp. (JDU-T) , (JDSU-O) slipped C$8.40 to trade at C$175.00 and Nortel Networks Corp. (NT-T) , (NT-N) fell by C$6.10 to trade at C$175.00.
"The momentum players in the market have all started to pull back out of Canadian technology," said Subodh Kumar, chief strategist at CIBC World Markets.
"Markets are going to shift from being momentum (driven) toward being valuation driven. Which doesn't mean that people will stay away from tech or health care -- but they'll become more discriminating."
The TSE software group dropped 306.46 points, or 6.3 percent, to 4525.90 points on Wednesday, while hardware slipped 1786.34 points, 2.8 percent, to 61284.12.
Biotechnology and pharmaceuticals fell 21 points to 2720.40. That pullback follows losses on Tuesday after leaders in the United States and Britain advocated free access to human gene mapping research -- which would strip the sector's profit motive.
-- Carl Jenkins (Somewherepress@aol.com), March 16, 2000