Investors were finally able to relax a little, as June 30th came and went
with relatively little fanfare. At the start of last week, market watchers
were pleasantly surprised to learn that the U.S. transferred sovereignty to
the interim Iraqi government two days ahead of schedule. "The handover's been
done, so now the uncertainty of something big happening before that is out ...
The other thing is that people seem to have become reconciled to what the
Fed's going to do, so there shouldn't be any surprises there," said Edgar
Peters, chief investment officer at PanAgora Asset Management, to Reuters
News. Following that sentiment, investors were not surprised to see a quarter-
point rate hike to 1.25%, and the Fed keeping their "measured approach"
language. June 30th also marked the closing of the second quarter, which also
means pre-announcement time. On that front, tech stocks disappointed, as Amkor
Technology, Emulex, Lexar Media, Sybase and Maxtor all lowered their guidance.
Some negative brokerage comments also weighed on the tech sector. Morgan
Stanley said the midpoint of Intel's third-quarter revenue outlook could be
lower than estimates. Also, Smith Barney downgraded Yahoo!, commenting that
the stock has "surpassed our price target." On the flip side, Research In
Motion posted a stronger-than-expected quarterly profit and raised its
financial forecast. Separately, the European Commission temporarily suspended
sanctions against Microsoft, which required the software titan to begin
selling a version of its operating system without media player software. This
week, seasonal slowness will continue with very light economic and corporate
earnings calendars. Still, investors should relish these moments, as the fast-
approaching earnings season promises to quickly heat up the market.
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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