The JSE`s IT sector continued on its downward spiral this morning after poorly performing US markets caused a bloodbath yesterday, with Dimension Data and Datatec falling to levels last seen seven years ago.
The IT sector had lost 103 points or 2.67% to 3 761 by late this morning after losing 2.25% to 3 864 yesterday as bad news from the US took its toll.
Dimension Data lost 16c or 5.8% to close at 260c after 6% of its shares changed hands in London yesterday, while Datatec lost 25c or 4.7% to 510c.
Dimension Data lost another 17c or 6.54% to 243c this morning while Datatec recovered yesterday`s losses, rising 25c to 535c.
A year ago the companies` shares were trading at 996c and 1 070c respectively.
Comparex, which gained 10c yesterday, was unchanged at 530c this morning.
The sector moved mainly on poor performances by US markets, with the Nasdaq composite index falling 35.69 points or 2.9% to 1 216.44 and the Dow Jones industrial average losing 230.06 or 2.8% to 7 942.39. This was the first time it closed below 8 000 points in almost two months.
The broader S&P 500 index lost 26.14 points or 3.01% to 843.32.
Brokers say the fall in the US was the result of low new housing starts, high unemployment levels, profit warnings and brokerage downgrades.
Technology group EDS, previously seen as a safe bet, issued a revenue and earnings warning that dragged US technology stocks down. It expects earnings of about $0.12c to $0.15c a share in its third quarter, compared with a previous target of $0.74 a share.
Revenue expectations of $5.3 billion to $5.5 billion are 2% to 5% lower than a year earlier. It had forecast a 4% to 6% increase.
Dow-listed rival IBM also saw its shares fall as Wall Street analysts cut their estimates, citing the fact that about 40% of IBM`s sales comes from the IT services market. EDS indicated that customers were delaying IT projects.
Networking group Sun Microsystems also took a hit after a downgrading by Banc of America Securities.
The JSE`s IT sector was not the only one to be bathed in red yesterday. The all-share index lost 130 points or 1.36% to 9 451. Dealers say pressure resulted from negative offshore sentiment, a stronger rand and the futures close-out.
The overall market was back in the green this morning, with the all-share index up 0.63% to 9 510.91. Financials, industrials and resources were all up marginally from yesterday`s close.
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