As the search for evidence of a recovering economy continues, with the
exception of a few stars, tech stocks did little to appease investors last
week. Among the stars was chip titan Intel, which doubled its quarterly
profits on increased demand for its equipment. Art Hogan, chief market
strategist at Jefferies & Co., told DowJones Newswires, "More important ...
will be outlook statements. The guidance we get has to be more upbeat than
what we've gotten in the first quarter." Oops. Guidance could get in the way
of a beautiful bull run. In some cases, weakness was derived from what was
implied and not necessarily said. Even as International Business Machines
reported a higher profit and backed its 2003 estimates, the bellwether plunged
after its chief executive cited a "challenging economic environment," and
simply did not offer any indication of a rebound in tech spending later this
year. Communication equipment issues were also active last week. The bulls
received sobering news from Lucent Technologies and Nokia, both of which
lowered their forecasts well beneath expectations, with Lucent pushing its
promise for a profit to next year. Motorola was also a disappointment;
however, Ericsson's quarterly results were much better than expected and the
world's largest mobile networks maker said it would post a profit this year.
Also, software titan Microsoft encouraged some buyers with a 26% rise in its
net profit and a boost to its fiscal year forecast. "The curtain has not drawn
shut on the post-March rally, but the fat lady sounds like she's warming up .
. .the bulls need to see evidence of strength soon," commented Kenneth Tower,
chief market strategist at CyberTrader, to DowJones Newswires. With the bulk
of financial reports out by this week's end, market watchers will soon need to
deliver their verdict on the fabled second-half turnaround.
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
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