Techs bounced back last week, after the Nasdaq approached levels that
signaled a technical bear market, or 20% below its 2004 high in January. "CEOs
are more concerned about the economy; they haven't cut budgets, but they
haven't spent what's been allocated," said Steve Milunovich, global tech
strategist for Merrill Lynch, to The Wall Street Journal. "We're fundamentally
in a bear market in tech." Not willing to succumb to the bears, some
communication equipment stocks grew horns. Motorola expects to sustain strong
sales growth in the second half of 2004. Peter Cardillo, chief market analyst
at S.W. Bach & Co., said in a Reuters news piece, "Motorola's announcement
will help lift some of the cloud overhanging the market as regards to earnings
in the second half, though it won't erase all of it." Elsewhere, Ciena's
quarterly loss was narrower than expected, while Nortel rallied after
releasing its preliminary results for the first half of 2004 and announcing
plans to cut about 10% of its workforce. Also, Network Appliance was a
highlight with its stronger-than-expected quarterly profit. In addition,
Google surged following its market debut. Leading up to the highly anticipated
event, the Internet search firm had to cut the price range and number of
shares to be offered. Within the chip space, Applied Materials reported
stronger third-quarter earnings, but expects its current-quarter earnings to
fall beneath the mean Street estimate. Elsewhere, Synopsys plunged on a
warning its current-quarter profit would be lower than expected. Despite the
comeback for tech stocks, oil prices are dangerously close to the $50-a-barrel
mark. Larry Wachtel, market analyst at Wachovia Securities, said to Reuters
News, "The market is very oversold and it is beginning to draw some support
from cash-rich institutions but if the price of oil continues to vault upward
and goes up to $50, all bets are off."
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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