The Nasdaq took a significant hit last week, falling over 3% in one
session, its biggest one-day retreat in six months. However, the exodus of
buyers was not due to a corporate plague, but rather other market forces. "The
fact is that the stock market may be slightly overvalued and investors may be
reassessing their portfolios and the future direction of the economy and how
long the economy will take to actually show continued growth," said John
Person, head financial analyst at Infinity Brokerage Services, to Reuters
News. Starting last week off on the wrong foot was a call for more flexible
exchange rates from the Group of Seven nations, which sent the dollar down
sharply. "A weaker dollar undermines foreign investors' confidence and
willingness to put their money to work in the U.S. stock and bond markets,"
commented David Gilmore, partner at Foreign Exchange Analytics, to The Wall
Street Journal. Also, a surprise cut in oil output by OPEC sent stocks
plunging on fears that higher energy costs could suppress an economic rebound.
Meanwhile, the global chip group encountered some bearish research from
Dresdner Kleinwort Wasserstein, who commented that "end-demand remain[ed]
lackluster in most segments." The brokerage also cut its rating on Micron
Technology, a move that overshadowed the firm's narrower net loss. An unlikely
source of strength was Motorola on word its Chairman and Chief Executive
Christopher Galvin is retiring after disputes with the board regarding the
firm's strategy. Still, the tide turned quickly after a WSJ article reported
that delays in delivering its first camera phones in the U.S. will cause
Motorola to miss most sale opportunities during the holiday season. This week,
investors will find out if September turned out to be its typical lackluster
self, despite encouraging market movements earlier in the month.
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
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