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HP Leads Drop in Silicon Valley Companies

July 15, 1996|From Bloomberg Business

PALO ALTO — Stocks of Silicon Valley companies suffered their biggest one-week drop in more than four months last week, led down by a 15% drop in shares of Hewlett-Packard Co.

The Bloomberg Silicon Valley Index sank 13.58 points, or 8.33%, during the week to 149.53, a 52-week low. The index, a price-weighted list of 53 high-technology companies, has fallen in eight straight sessions, losing 13% during that time.

Of the 53 stocks, 50 ended the week lower, with two rising and one unchanged. Hewlett-Packard posted the biggest loss, plummeting 14 to 78 1/8 for the week. On Wednesday, HP, the second-biggest computer maker behind International Business Machines Corp., said growth in orders for its fiscal third quarter will be less than the 24% for the previous quarter, even in its historically strong printer line.

The company also said its earnings might lag expectations, and it abruptly ended its disk drive business, closing two plants and resulting in a pretax charge of about $150 million.

Hewlett-Packard's announcement raised fears that the industry slowdown, which analysts had expected to ease in the fall, could continue to hamper technology company profits in the second half.

Computer makers were punished by the news. Sun Microsystems Inc. lost 5 1/4 during the week to end at 50 1/2. IBM fell 2 9/16 to 95 5/16, and Apple Computer Inc. dropped 1 7/16 to 18 1/16.

Netscape Communications Corp. fell 9 3/4 to 48 1/2, a three-month low.

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