Last week, investors turned a blind eye to strong financial reports from
the tech sector, and instead decided to focus on the possibility of an
interest rate hike. A surprisingly robust retail sales figure and a jump in
consumer prices for March spawned concern earlier in the week that the
stronger economic indicators will force the Fed to lift interest rates later
this year to curb inflation. "The market is adjusting itself to a rate hike
and once that adjustment abates, the market will refocus on the strong
fundamentals of the stock market," said Peter Cardillo, chief market
strategist at S.W. Bach, to Dow Jones Newswires. Investors largely ignored a
string of healthy tech earnings. Within the chip space, Texas Instruments and
Novellus Systems both posted stronger-than-expected results. Chip giant Intel
and Advanced Micro Devices also put in an impressive quarterly performance,
but some forward looking comments on certain sales items caused investor
concern. John Waterman, chief investment officer of Rittenhouse Asset
Management, told Reuters News, "This market is moving sideways in a
consolidation range . . . It's a tug of war between rising rates as the
economy picks up steam and the strength of the recovery and earnings growth."
Elsewhere, Nokia slumped on a dour second-quarter earnings outlook. Turning to
the computer hardware group, IBM reported strong first-quarter results, but
only met expectations and some were disappointed by the operating profit at
its services division. Market watchers also punished Sun Microsystems for its
large quarterly loss. Still, Apple Computer surged, as strong sales of its
iPods aided earnings, while EMC Corp. also posted robust quarterly results.
This week, investors will continue to wade through the latest earnings
reports, including those from software titan Microsoft and Motorola, amid a
dearth of economic news.
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 Corporate Group
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