Last week, earnings season kicked off to a relatively good start for the
tech sector; although, some market watchers are concerned the optimism has
already been built in. Tim Heekin, director of trading at Thomas Weisel
Partners, told the Wall Street Journal that many investors believe
"better-than-expected third-quarter earnings really have been priced into the
marketplace." Still, Yahoo! pleasantly surprised the Street with its
better-than-expected quarterly profit. The news sent the Internet media
company and Web stocks in general, soaring. "It looked like the third-quarter
earnings period was going to be pretty good, but you didn't have any actual
numbers to sink your teeth into," said Stephen Massocca, president and head of
trading at Pacific Growth Equities, to Reuters. "Today, you've three or four
or five data points showing that, at least at the very beginning, earnings are
coming in better than expected." Out of the communications technology space,
Juniper Networks reversed a year-earlier loss and raised its fourth-quarter
earnings estimate and revenue outlook. Elsewhere, Motorola's plan to split its
chip business into a separate company was warmly received by investors.
Another positive market catalyst was a drop in jobless claims to an
eight-month low, rekindling hope of a stabilizing labor market. "There's no
doubt that the market had been looking for better news on the job front and we
got some again today," said Brian Pears, head of equity trading at Victory
Capital Management, to Reuters News. "Right now with the market closing above
its 52-week highs and moving up meaningfully and ahead of earnings, I think
people are really looking for concrete reasons to commit new funds to this
market." As the market becomes further entrenched in earnings this week, only
time will tell how much investors are willing to spend on upbeat reports.
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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