A rash of upbeat industry and capital spending outlooks should have sent
buyers out in droves last week; however, investors remained cautious. Out of
the computer group, Hewlett-Packard suffered from some negative research from
Lehman Brothers, who sees seasonal fluctuations on sales of printers and
computers for large corporations. Meanwhile, Dell posted a 21% rise in its
quarterly profit and forecast a stabilizing computer market amid a better
corporate IT spending environment. Following this trend, International
Business Machines was a highlight, after a Barron's article noted a rise in
technology spending should impact the firm. Subsequently, the tech titan
backed this view, commenting that companies had increased their budgets for
information technology in 2004. Chip stocks were in for a tumultuous ride.
Referring to the group, Jack Caffrey, equity strategist at J.P. Morgan Private
Bank, said in a Reuters piece "That's a particular group that has been weaker
over the past few days, and investors are making sure they are well positioned
for December, which has historically been a good month for stocks." Semi
issues, particularly Advanced Micro Devices, jumped on a Gartner forecast,
calling for the industry's sales to rise over 20% in 2004 from this year. By
the time Applied Materials released its quarterly results, chip buyers had
already gone home. Despite seeing the early stages of an industry uptrend and
forecasting that first-quarter orders should advance by 20%, the stock tanked.
"We're in a waiting game for the next round of good news," said Jeffrey
Kleintop, chief investment strategist at PNC Advisors to Reuters News. "We got
good news through the earnings season and good news from the employment
report, but it's going to take some time for these data points to all come
together and paint a picture of a sustainable recovery."
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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