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Silicon Valley Stocks Keep On Falling

June 24, 1996|Bloomberg Business News

PALO ALTO — Stocks of Silicon Valley companies fell last week, led by Internet software maker Netscape Communications Corp. and Netcom On-Line Communication Services Inc., an Internet connection provider.

The Bloomberg Silicon Valley Index dropped 8.05, or 4.6%, to 166.84, an 11-week low. The index, a price-weighted list of 53 high-technology companies, has fallen 15% since reaching a 52-week high of 196.39 on May 20.

Netscape posted the biggest weekly loss on the index, tumbling $6.875 to $55. The company's shares fell in the past eight days after Microsoft Corp. introduced products to compete with Netscape in helping companies set up cheap internal networks.

Netcom posted the second-biggest loss for the week, falling $4.50 to an eight-week low of $28.75. Netcom's network was out Tuesday, leaving its customers unable to connect to the Internet for 13 hours.

Analysts said demand for Internet connections is still strong, with 90% of the U.S. population still untapped. Most Internet stocks fell last week, with online services CompuServe Inc. and America Online Inc. each reaching three-month lows early in the week.

Other stocks that fell included Cadence Design Systems Inc., which tumbled $5.25 to $38.375, down 87.5 cents Friday. Lam Research Corp. fell $5.125 to $25.375, down 37.5 cents on Friday.

Oracle Corp. posted the week's biggest gain, rising $4.125 to $38. Oracle had most of that gain Friday after it reported fiscal fourth-quarter earnings that were better than Wall Street expected.

Sun Microsystems Inc. rose $3 during the week to close at $60. 3Com Corp. gained $1.75 to $48.75.

In Friday's trading, most chip makers, disk drive makers and other suppliers to the personal computer market fell on concern about lower earnings. Advanced Micro Devices Inc., Cyrix Corp., Sierra Semiconductor Corp. and Cypress Semiconductor Corp. all warned of lower-than-expected earnings.

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