Last week, corporate news from the tech sector sent stocks roiling. Chip
giant Texas Instruments was severely punished after revising its third-quarter
forecast. Also inciting profit taking was a somewhat disappointing outlook on
mobile phone sales from Nokia. Phil Flynn, vice president and senior market
analyst with Alaron Trading Corp., told Reuters News, "We have to keep in mind
that the Nasdaq has had an incredible rally so these earnings on the tech
sector have a lot to live up to . . .After the run-up, the market could be set
up for some minor disappointments." However, some believe the market is
undergoing more than just a few small hiccups. "We've not seen the top-line
growth," said Partner Re Asset Management President and Chief Executive
Officer John Davidson in a Reuters' news piece. "A lot of earnings have been
generated by not spending on plant and equipment and not rehiring workers. The
key to the recovery is looking for top-line growth. At this point we really
haven't seen that." Dow member International Business Machines achieved a
brief market rescue after Credit Suisse First Boston raised its rating.
Interestingly enough, a subsequent downgrade of IBM by Smith Barney later in
the week had little impact. Within the software group, Adobe Systems reported
unexpectedly strong quarterly results that bolstered both it and the Nasdaq.
But the software group's party was busted after Oracle reported lower-than-
expected quarterly revenues and software license sales, a barometer for
business momentum. Still, Oracle Chief Financial Officer Jeff Henley said in a
conference call, "I've talked to management; they're all very excited, and
feel like we're going to have a very good Q2. I think the economy is
improving, and the research I read says the customer demand is there." Let's
hope the bullish sentiment rings true.
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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