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And so we begin the tech sector's journey into the Heart of Darkness

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Comment Does anyone else remember when technology companies were propping up this economy?

Yeah, that's right. Oil prices were surging. Housing prices were plummeting. But there was the resilient technology sector, making us think things might be okay. No companies missing earnings. No layoffs. Hope at the end of the fab.

Um, well, I don't know how to put this, but the technology sector - as one of my Wall Street friends likes to put it - has blown up.

As this story goes to print, Sun Microsystems stands as a $6.9bn company, trading at $8.81 per share. Less than a year ago, Sun performed a 1-for-4 reverse stock split, kicking its shares from $5.14 to $20.56. It hoped that move would placate some institutional investors who demand a meatier share price and give the stock, long hovering between $4-$6, a psychological boost. Instead, Sun is nearing pre-split levels, and its reduced stock market value means that some funds dealing only in large market capitalization stocks will likely have to begin selling Sun.

AMD - the great David to Intel's Goliath - is valued at $2.78bn. Remember, this is the same company that bought ATI in 2006 for $5.4bn. So, David may still have a slingshot, but he's on his way to the pawn shop to see how much it's worth.

(Incidentally, if anyone out there can explain how Hector Ruiz has managed to remain CEO of that company, I'd love you to fly out here and negotiate some property deals for me.)

AMD's rival Nvidia is hurting too. Nvidia shares have dumped down to $11.36 from $40 last October. It's now a $6bn company, apparently making it worth twice as much as AMD, but who would want either one?

And what of the one-time darling VMware? It was up there at about $40bn in market capitalization only a few months ago, making the software giants who had come before it look like amateurs. At $38.98 per share (down from $125), it's now just a $15bn company.

EMC's CEO Joe Tucci decided to make sure you all knew exactly how bad this situation was by unexpectedly firing VMware's CEO Diane Greene and lowering VMware's full-year revenue expectations on the same day, using the precise language of "modestly" reduced earnings. Investors love it when CEO swaps come out of nowhere. It makes a company look very stable and like it had a succession plan or something. Oops.

Well, that's EMC in the tank too. At $12.73 per share, it's right around a 52-week low and valued at less than half what it was this time last year.

Google's looking pretty sickly. Its shares - $526 - are way off the year ago $747 highs. Worst of all, people are starting to try and understand Google's business. Just wait and see what happens when Google really misses a quarter, and everyone figures out that they have no idea how Google's money machine works. That'll go over well.

Cisco may have more money than God in the bank, but it's considered a lousy investment. It hit a new 52-week low this morning at $20.72 per share.

And what about HP? I mean, it just makes money and then makes more money under CEO Mark Hurd. Superstar. Fiscal wunderkind. A hero of printing and imaging.

Nah, it's near a 52-week low too at $42.06 per share.

If you're not depressed yet, then you will be after thinking about who buys the products made by these companies and what kind of financial health they're showing. Heaven help you if your company is at all dependent on the financial services sector where your clients are being propped up by the government or enjoying a good old-fashioned run on the bank.

Then there's that stalwart GM. It's almost dead.

That marvel of efficiency and technology know-how Federal Express is trading at $73.90 - waaaay off the $118 it flashed at this time last year.

Even the mighty Exxon Mobil with high oil prices leading to record profits is trading at $84 per share, down from $96.

And, dear lord, this is all with a weak dollar propping up US companies' financial results. That's left a company like IBM as a beacon of hope, but how long will even its good run last?

Unless just about every technology company going has an "iPod moment," then we're looking at a grim scenario where layoff reports will become rather common. That's especially painful news for people already being worked over by rising gas prices and overbearing mortgages.

We'll know just how bad things are for the technology sector, starting today when Intel reports second quarter financial figures. Intel's report will kick off three weeks of earnings releases - a journey that's starting to look like a dive into the heart of darkness. ®

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