Early last week, market watchers were scooping up tech stocks ahead of the
second-quarter earnings blitz. "The market is trending higher and no one
wants to be caught empty-handed, so investors seem to be aggressively coming
into the market," said Neil Massa, equity trader at John Hancock Advisors, in
a Reuters piece. An assortment of catalysts led the Nasdaq to near a 14-month
high early on, with semiconductor issues leading the advance. Deutsche
Securities upwardly revised its outlook on the global chip market, while
Goldman Sachs' latest information-technology survey indicated a pickup in
technology spending next year, for the first time since 2001. Prudential also
gave a sunny outlook for the IT hardware space, expecting a modest recovery in
IT demand in the first half of 2004. In company-specific news, chip titan
Taiwan Semiconductor Manufacturing said its revenue for June surpassed its
forecast. Also garnering much interest was Microsoft, as it will grant
employees stock awards instead of stock options. However, Yahoo! disappointed
investors, despite posting a higher profit that met analyst expectations, and
their wrath was felt across the broader market. Wishful thinking from market
watchers looking for the Internet portal to beat estimates and justify its
rocketing share price, which has more than doubled since the beginning of the
year, was quickly replaced with pragmatism and subsequently, a steep drop in
the firm's shares. "Yahoo's earnings started everything. There's a lot of
concern about its earnings. Though they were in line, people were obviously
expecting a lot more," said Peter Dunay, chief market and options strategist
at Wall Street Access, to Reuters News. This week, investors are hopeful that
as earnings season heats up, with results expected from tech bellwethers
Intel, IBM and Microsoft, their recent buying spree will be justified.
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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