The computer services sector, where contracts are signed well in advance and there is a suit-wearing, old-economy style, had always seemed a predictable stock market bet.
But a warning by Electronic Data Systems Corp., a top player in the computer services field, has turned that bit of optimism on its head.
Fear that corporations may further pinch pennies for technology spending shook the computer services sector on Thursday, sparking a sell-off.
EDS warned late Wednesday that spending by its existing customers had virtually stopped and that a lack of new deals would erase a huge portion of its expected profits. In response Thursday, ratings agencies Standard & Poor's and Fitch cut EDS' debt ratings.
News source: Yahoo! News
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