The broader markets mostly flat-lined Wednesday after the previous day’s monster rally, but wildly skewing from the trading day’s normality were tech stocks, which bombed after Oracle (NASDAQ:ORCL) reported its first earnings miss in more than a decade.
Oracle took its worst beating since 2002, shedding close to 12% and practically cementing a double-digit percentage decline for 2011. ORCL shares are down 17% year-to-date, a mirror image of early May, when the stock was up about the same amount.
Oracle’s adjusted earnings of 54 cents per share missed Wall Street estimates of 57 cents, though the company did increase net income by 17% over the year-ago period. A particularly troubling piece of news was Oracle’s shortfall in new software licenses. The company previously had predicted a 16% increase, but reported a mere 2% gain.
Oracle’s earnings merely continued a recent string of disappointing forward-looking news from companies like Red Hat (NYSE:RHT) and Texas Instruments (NYSE:TXN), and the tech sector bowed to the weight Wednesday, with big losers including VMware (NYSE:VMW, -9.93%), NetSuite (NYSE:N, -7.34%), SAP (NYSE:SAP, -6.26%), Salesforce.com (NYSE:CRM, -5.07%) and Redhat (-4.89%).
Also Wednesday, Exelon (NYSE:EXC) got one step closer to finalizing its purchase of Constellation Energy Group (NYSE:CEG) when it got the OK from the U.S. Department of Justice. The DOJ insisted that, as part of the nearly $8 billion deal, Exelon must divest three electric plants in Maryland for competitive purposes. EXC shares got a 2.7% boost on the news.Three Up
As of this writing, Kyle Woodley did not hold a position in any of the aforementioned stocks. Check out our list of previous IP Market Recaps.