In one of the busiest reported-earnings weeks of the quarter, investors
gingerly toyed with stocks, unwillingly to make any major commitments. Perhaps
the muted approach to stocks stems from the sundry economic data that filled
investors' plates. Cantor Index's David Buik commented to Reuters News, "There
is little doubt that the market seems underpinned at the moment and that
investors seem to have quite a healthy appetite to own stock, despite
dispiriting economic data, well illustrated [Wednesday] by the content of the
Beige Book." The Federal Reserve's Beige Book survey indicated that the U.S.
economy continued to be lackluster in March and early April, as the war with
Iraq limited business and consumer spending. Also, the four-week moving
average for initial jobless claims rose to a one-year high and the gross
domestic product grew at a paltry 1.6% annual rate in the first quarter.
Still, March's durable-goods orders unexpectedly rose 2.0%, while April's
consumer sentiment figure came in ahead of expectations. Tech earnings
probably fared better as the Nasdaq Composite Index rose to its highest level
this year on Wednesday. Charles Payne, chief executive at Wall Street
Strategies, told Dow Jones Newswires, "We certainly don't have executives out
there waving pompoms about better business conditions, but we are hearing more
about bottomings or business even beginning to pick up." Within the winners'
circle, Qualcomm reported a 50% leap in revenue and raised its full-year
estimate again due to strong demand for its advanced cell phone chips. Also,
Xerox spurred higher after it beat analysts' first-quarter estimates. The
company sees higher demand in key markets and is confident about future
performance. Software stocks Veritas and BMC Software both came in ahead of
estimates, as did chip issues KLA-Tencor and LSI Logic. But semiconductors
suffered a relapse at the end of the week after Salomon Smith Barney lowered
its rating on the industry to "underweight." Perhaps this week, as the pace of
reported earnings subsides, investors will decide on a definitive market
direction.
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.thomsonfinancial.com.
SOURCE Thomson Financial Corporate Group
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