Dell shares sink on warning about weak demand

By JORDAN ROBERTSON Sept. 16 , 2008

Hurting from price cuts and an expensive restructuring, Dell Inc. rattled investors Tuesday with another warning, this time that corporate spending on technology is weakening further. By most measures, the technology sector has been chugging along fine, which is why Dell's announcement caused uncertainty about whether the problem is specific to Dell or indicates broader problems in the market. The revelation caused Dell's shares to fall $2.01, 11 percent, to $15.98 - their lowest level since September 2001 - and dragged down other technology companies' stocks, including Sun Microsystems Inc., whose shares fell 4 percent, and IBM Corp., whose shares dipped in early trading but rebounded. A big part of Dell's problems stem from its poor competitive position in growth markets outside the U.S., and are not necessarily representative of troubles that will hit other companies as severely, analysts said.

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