As investors chase the sun throughout August, in what is typically known
as a sleepy month for the market, one must wonder if the current trading range
is symptomatic of the dwindling summer, or more deep-rooted problems. Market
watchers seem to be leaning toward the latter. Paul Cherney, chief market
analyst at Standard & Poor's, commented in a Reuters News piece, "We've
anticipated all the good news that the second-quarter earnings reports can
deliver and without some sort of dynamic shift to a much more bullish set of
headlines, I have trouble understanding what is going to spur new buying right
now." Not helping matters was Cisco's highly anticipated quarterly report,
which sent the networking-gear maker deep into the red. Despite seeing a 27%
rise in its fourth-quarter profit, the bellwether met, instead of exceeded,
Street expectations, which disappointed many. Another dark horse was
Hewlett-Packard, which slumped after J.P. Morgan and Goldman Sachs lowered
their third-quarter revenue estimates on the Dow component. The brokerages
cited weak sales to large firms and aggressive pricing in the
personal-computer market for their revised outlooks. "Investor sentiment is
becoming less confident, which is what happens when the market heads down
after an extended lift," said A.C. Moore, chief investment strategist at
Dunvegan Associates, to Reuters News. "For the shorter term, the market is
overbought, and I think we could see some weakness over the next few weeks."
This week, chip firms Applied Materials and Analog Devices, as well as Dell
Computer, are set to report their quarterly results. Tech stocks could see
some movement on their reports; however, with little in the way of earnings on
the horizon, investors may need to search outside the sector for guidance.
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
back to top
