Shares of technology companies gave back some of their recent gains as Treasury yields rose.
Dell Technologies slipped after the computer-services giant said it was cutting 6,600 jobs, or about 5% of its work force, citing a market slowdown. The recent spate of layoffs was a "ripple not a wave," viewed in a broad economic context and should be viewed with certain caveats about the corporations involved in mind, said economists at brokerage Goldman Sachs Group, in a note to clients.
"First, many are in the technology sector," said the Goldman economists. "Second, many hired aggressively during the pandemic -- on average, their headcount grew 41% -- often because they over-extrapolated pandemic-related trends such as increases in demand for goods or time spent online. Third, they have seen sharper declines in their stock prices, which have fallen 43% from their peaks on average, and in some cases appear to be responding to investor demand to cut costs by shrinking their workforces rather than to a worsening in the demand outlook."
Alphabet's Google is rolling out a new conversational artificial-intelligence service named Bard A.I. to a small test market, seeking to compete with OpenAI product ChatGPT, which has captured the public's imagination.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
02-06-23 1736ET
