By Wallace Witkowski, MarketWatch
Tech stocks weighed upon the broader indexes Wednesday, led lower by software, cybersecurity and chip stocks.
The iShares Expanded Tech-Software Sector ETF /zigman2/quotes/201870252/composite IGV +2.82% declined 1.3% as Salesforce.com Inc. /zigman2/quotes/200515854/composite CRM +2.18% dragged on the sector. For the year, the ETF is up 19%.
Salesforce shares were last down 2.9% at $154.75. Late Monday, 50 women filed a lawsuit in San Francisco Superior Court against the customer-relations management software company, alleging the company actively helped the now-defunct adult-classified ad website Backpage in marketing to new users. Less than a year ago, federal officials shut down Backpage on prostitution and sex-trafficking charges and Backpage’s CEO pleaded guilty to conspiracy and money laundering charges.
Other software names down more than 2% were Zendesk Inc. /zigman2/quotes/209571012/composite ZEN +2.79% , Tableau Software Inc. and Paycom Software Inc. /zigman2/quotes/208108773/composite PAYC +3.76%
Many of the names weighing on the IGV software ETF — such as Palo Alto Networks Inc. /zigman2/quotes/207599953/composite PANW +1.74% , Splunk Inc. /zigman2/quotes/203060494/composite SPLK +5.10% , Fortinet Inc. /zigman2/quotes/205733290/composite FTNT +1.13% — were also pulling down the ETFMG Prime Cyber Security ETF /zigman2/quotes/207892345/composite HACK +2.19% , which was off by 1.3%. For the year, the HACK index is up nearly 17%.
Leading the HACK security ETF lower were shares of SecureWorks Inc. /zigman2/quotes/202179762/composite SCWX -6.34% , which dropped 12% after the company late Tuesday forecast a loss of 6 cents to 5 cents a share on revenue of $131 million to $133 million for the current quarter, while analysts were looking for break-even results on revenue of $136.7 million. SecureWorks also said its CFO R. Wayne Jackson was leaving at the end of January 2020.
Among other cybersecurity stocks down more than 2%: SailPoint Technologies Holdings Inc. /zigman2/quotes/208922889/composite SAIL +1.32% , Zscaler Inc. /zigman2/quotes/203585803/composite ZS +2.76% , Forescout Technologies Inc. , Rapid7 Inc. /zigman2/quotes/203905856/composite RPD +2.34% , and Qualys Inc. /zigman2/quotes/201504669/composite QLYS +1.69%
Chipmakers were also trading lower as the PHLX Semiconductor Index /zigman2/quotes/210598361/realtime SOX +1.42% fell 1.7%, led by a 3.7% decline in Advanced Micro Devices Inc. /zigman2/quotes/208144392/composite AMD +2.95% . For the year, the SOX index is up nearly 19%.
Shares of Qualcomm Inc. /zigman2/quotes/206679220/composite QCOM +2.06% were down 1.8% following a series of legal wranglings that have both gone the chipmaker’s way and Apple Inc.’s /zigman2/quotes/202934861/composite AAPL +3.75% way.
In comparison, the S&P 500 index /zigman2/quotes/210599714/realtime SPX +1.60% was down 0.4% and the tech-heavy Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +2.26% was down 0.6%. For the year, the S&P 500 is up 12% and the Nasdaq is up 15%.