The market continued to reach new highs last week, with the Nasdaq finally
hitting 1600 for the first time in over a year. Investors' assurance in the
economy and corporations became apparent when good news propelled the market,
while negative information was largely shrugged off. On the economic front,
the Institute for Supply Management reported that the manufacturing sector
slowed its contraction. "There's growing confidence that the economy is
improving. You look at the tax cuts, the fact that we're going to have low
interest rates for a while, and the weaker dollar. The ISM number adds to that
confidence," said Rich Nash, chief market strategist at Cleveland's Victory
Capital Management, to Reuters News. Meanwhile, a steep fall in factory orders
and a rise in the unemployment rate did not stop the Nasdaq from rising.
However, International Business Machines placed a damper on the market after
announcing that the Securities and Exchange Commission had begun a formal
investigation into its revenue accounting during 2000 and 2001. Also, software
issues suffered from Microsoft Chief Executive Steve Ballmer's comment that
the firm still faces "significant challenges" amidst the weak economy and
competition from the Linux operating systems. Still, Intel backed its guidance
in its mid-quarter update, although narrowed the range of its expected
revenue. One of the biggest news items of the week revealed itself in the form
of an acquisition. Oracle made an unsolicited bid for PeopleSoft, just days
after that company announced plans to acquire J.D. Edwards. The recent merger
and acquisition attempts have also sparked speculation over corporate
confidence in a recovering economy. Market watchers will naturally be
monitoring the Nasdaq's rally mode in hopes that this time the market has
genuinely turned the corner.
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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