Tech stocks erased some of their recent losses last week, albeit at a
timid pace. Some pleasing results and/or outlooks from the likes of Nokia,
Texas Instruments and Oracle helped revive the sector. However, the long
string of earnings releases and forecasts was not free of disappointments, and
analysts would cringe at the smallest kinks in the reports. While select
observers cheered a delayed January rally, some more somber pundits commented
that last week's gains were only a dead-bounce cat. Talking to CBSMarketWatch,
Profitable Investing's Richard Band explains, "The stock market finally seems
to be shaking off a bit of its January malaise ... Today's ... rally in the
Dow, coming after four down days in a row, could set the stage for a
surprisingly strong bounce into early February. Key to a durable rally: We
need to see improved performance by Nasdaq, [as relative strength by Nasdaq
suggests investors are feeling an increased appetite for risk] ... Until [we
know the rally is for real, however], I advise you to keep your buying focused
on the market's safest stocks -- the champion dividend payers." This week, a
long list of economic reports on manufacturing, consumer sentiment and labor,
in addition to a Fed meeting, could steal the spotlight from earnings. On the
bright side, December non-defense capital goods orders excluding aircraft grew
a greater-than-expected 1.8% from a year ago, well above the 0.9% gain of
November. While some analysts predict that capital spending on such goods will
slow, in line with profit growth, others believe that since a pick-up in
spending was slow in materializing following the Internet bubble debacle,
there is still some room for growth in the near-to medium-term, that is, if
consumer spending remains stable, and until higher interest rates curb
corporations' appetite for capital goods.
High-Tech Monday Update is provided courtesy of Thomson Financial. This
information is believed to be true and accurate; we take no responsibility for
inaccurate information and reserve the right to update our reports. For more
information, please visit our web site at http://www.thomson.com/financial.
SOURCE Thomson Financial
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