JDS Uniphase, Brocade Tumble As Rate Cut Reinforces Pessimism
NEW YORK -- Technology issues fell again and consumer names retreated as investors interpreted the Federal Reserve decision to cut interest rates again as a signal that economic trends remain weak.</br></br>A host of telecommunications-gear makers fell during trading. Communications-chip maker Broadcom shed $4.73, or 13%, to $33.06 in Nasdaq Stock Market trading. Optical-equipment maker JDS Uniphase, which hit a 52-week low Monday, fell further, dropping 44 cents, or 5.9%, to 7.07. Cellphone-chip maker RF Micro Devices slid 2.02, or 7.9%, to 23.54. Storage-software developer Brocade Communications retreated 1.60, or 5.9%, to 25.47. All trade on Nasdaq.</br></br>The weakness came after the Federal Reserve voted to lower interest rates to 3.5% from 3.75%, marking the central bank's seventh rate cut this year.</br></br>Market averages, which had moved slightly higher, albeit in thin trading, ahead of the release of the Fed's decision, veered lower. The Nasdaq Composite Index finished down 50.05, or 2.7%, at 1831.30, the lowest the index has finished since April 9. Technical analyst Peter Green of Gerard Klauer Mattison speculated the Nasdaq composite could fall another 4% during the short term, given the recent technical patterns.</br></br>The Dow Jones Industrial Average closed down 145.93 points, a 1.4% drop, at 10174.14, its lowest finish since April 12.