Last week, investors maintained a safe distance from tech stocks ahead of
Intel's financial update and May's employment report. OPEC's pledge to raise
output also benefited stocks. "The techs are down as people await Intel's
guidance," said Rick Meckler, president of LibertyView Capital Management, in
a Reuters news piece. "In technology lately, unless you can surprise to the
upside, it's seen as negative. Most people think it is unlikely Intel will
surprise to the upside." That point was driven home by other chip updates that
failed to inspire buying action. Fairchild Semiconductor backed its second-
quarter guidance, but noted that continued backlog "volatility" could impact
its ability to achieve targets. Meanwhile, Xilinx stood by its revenue
forecast for the current quarter, although some analysts were looking for the
firm to raise its guidance. Elsewhere, Nortel Networks slumped, after it said
that full-year 2003, first-quarter 2004 and restated results would not be
completed in the second period. Still, toward the end of last week, investors'
anxieties were temporarily put to rest. Intel raised the lower end of its
second-quarter revenue guidance range. Also, May's payrolls increase was
stronger than expected. Referring to the employment report, Michael Metz,
chief investment strategist at Oppenheimer & Co, commented to Reuters News,
"It was a bit better than expected, but I don't think it's that powerful to
change the market outlook or the outlook for the bond market. . . I think
stocks will react favorably to this because it shows the economy is growing at
a self-sustaining pace but not so rapidly as to cause distortions in labor
costs or force an early move by the Federal Reserve." This week, as the glow
of Intel and the employment report dims, issues surrounding oil, interest
rates and possibly Iraq will continue to hover.
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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