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Market Update

The Oracle Says Sell-Off Will Hurt Large-Cap Funds

Oracle's drop could sting funds that have let it ride on the company.

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An executive defection and ominous portents from Wall Street stock soothsayers cast a cloud over computer-software company Oracle (ORCL). The stock fell more than 13% after a Gary Bloom, vice president and potential heir apparent to Oracle's founder and chief executive Larry Ellison, left to take charge of Veritas Software (VRTS). A rash of analysts' downgrades on Oracle and other tech stocks also provoked the drop.

Oracle's drop probably will shave a bit off the net asset values of many mutual funds focused on the biggest and most liquid stocks in the market. The company, which makes software for virtually all of the computing needs of a business--from the customer service to business-to-business to back-office systems--shows up in the portfolios of more than 900 mutual funds, and 88% of them are large-growth or large-blend funds, according to's database.

Dan Culloton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.