The semiconductor sector momentarily got decimated last week, pelted by
chip shots from the likes of TriQuint and National Semi, a mixed outlook from
Texas Instruments and negative research from Lehman Brothers, among others.
Commenting on a semiconductor conference last week, SG Cowen believes that,
"the near-term outlook [is] cautious and uncertain. Companies highlighted
falling lead times, slowing in end market demand and inventory rebalancing. On
a more positive note, management teams focused on new product and end market
opportunities that offer longer term growth potential." In the meantime,
expectations of fresh profit warnings could turn many investors into "economic
girlie men," to quote California Governor Arnold Schwarzenegger, that is,
individuals adopting a defensive stance regarding their portfolios. Yet, some
pundits interpreted last week's market action, and techs' strong performance
overall, as a sign that traders are hee-ding Greenspan's upbeat tone by
switching to more economically sensitive sectors. Also looking ahead, Oracle
is expected to release its quarterly report this week. Analysts are cautious
about the software giant. Schwab Soundview believes the firm had "a decent but
not great quarter" and it "would not be surprised if li-cense revenue growth
is within rather than at the top of the range ... which would generate
questions ... regarding the November quarter." However, the broker notes the
high seasonality of Oracle's business and that recent downgrades have lowered
risks to the stock. Meanwhile, Morgan Stanley thinks that, "software demand
remained soft in July and August" and is taking "a more conservative approach
to growth to reflect more moderate demand." On the economic front, this week's
retail sales and con-sumer sentiment will be among the data likely to draw
attention, given the consumer's recent fickleness about buying tech and other
items.
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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