Last week, as the stream of earnings slowed down to a trickle, economic
news proved to be a powerful market force. Despite a mixed batch of economic
data, the value of technology stocks for the month of April surged by almost
10% from the prior month. This helped send the Nasdaq Composite Index to a
five-month high and up 10% in 2003. "Aside from the companies that have beaten
expectations, the other good thing we're seeing is that there really haven't
been any bombs, in terms of companies missing by a wide number ... Also, no
one is taking the opportunity to slash their estimates for the next few
quarters," said Chuck Hill, director of research at Thomson, to the Wall
Street Journal. As this earnings season releases near to a close, and for the
most part investors were pleased with the results, market watchers are waiting
for the economic data to catch up with corporate momentum. "The earnings
numbers we're seeing are sort of a double-edged sword, particularly given the
softer economic backdrop," commented Ozan Akcin, chief market strategist for
Ehrenkrantz King Nussbaum Inc, to the WSJ. April's U.S. manufacturing activity
contracted for a second-straight month, while first-quarter productivity
gained less than what economists were hoping for. But probably the most
anticipated piece of information was the employment report, which saw a
decline in nonfarm payrolls, albeit less than what economists expected, and a
rise in the unemployment rate to 6.0%. Turning to earnings news, software
stocks did well with Macromedia surging on a strong earnings report and a
brighter outlook. The company's rival Adobe Systems also powered higher after
raising its revenue targets for the current quarter. Ericsson helped lift
telecom-gear stocks and the broader market with its projection that it will
return to profitability by the end of the year. Going forward, as the impact
of war no longer factors into most economic reports, investors are looking for
the data to align itself with earnings.
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
back to top
