Last week marked the busiest week for third-quarter earnings. Early on,
Texas Instruments was a big winner, helping boost the Nasdaq, after posting a
surprisingly upbeat quarterly profit and providing a better-than-expected
outlook for the fourth quarter. However, what started out as a promising week
quickly turned sour. Stephen Massocca, head of trading and president of
Pacific Growth Equities, commented in a Reuters' news piece, "Relative to
expectations, you're getting a mixed bag. If you look at it in terms of where
we were a year ago, it's a very good season. But the market trades on where
these numbers come out, relative to expectations - not relative to where they
came out a few quarters ago." Of those firms raining on the earnings parade,
software maker Computer Associates International posted a wider quarterly
loss, while chip gear-maker KLA Tencor announced a disappointing growth rate
for new orders and lower-than- expected current-quarter results. Xerox was
also cut on a slip in quarterly revenue. "I think there's a little bit of
rotation - rotating back into the Dow Jones stocks and out of the techs...
They haven't had the move this year that the Nasdaq has. They're of less risk
in terms of going down and the gap should narrow a little bit between the
two," said Evan Olsen, head of equity trading at Stephens Inc., to Reuters
News. The nail in the coffin came from Microsoft. The software titan was
hammered on a decline in its deferred revenue balance, although the company
did post higher quarterly earnings that surpassed the Street's average
estimate. Still, upbeat sentiment still abounds. Gartner Inc. said at its
annual conference last week, in reference to technology spending, "2004 will
be the year that companies make the turn from protecting profitability to
driving growth."
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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