Last week, investors remained vigilant ahead of Intel's mid-quarter update
and November's employment report. Ahead of the weighty reports, trading was a
bit erratic in the tech sector, with no real catalyst to prompt a clear
direction. "The real issue here is that investors are spooked a bit by the
magnitude of the surprises," said Chris Wolfe, head of equities at J.P.
Morgan's private bank, to Reuters News. "You get to a point where given all
the positive economic surprises we've seen recently coupled with very strong
third-quarter earnings, investors start to question how long this can
continue." Still, the all important psychological level was reached, albeit
only briefly, when the Nasdaq hit 2,000 for the first time since January 2002.
"It's what I call a 'nostalgia' target for the individual investor," said
Frederic Dickson, market strategist at D.A. Davidson & Co., to Reuters News.
Investors were given a dose of reality at the end of the week; however, and
they were not afraid to express their dissatisfaction. A slew of comments from
Intel, Qualcomm and National Semiconductor suggested surprisingly robust
demand for their chips. However, market watchers zeroed in on Intel and were
disappointed that it did not raise the top end of its fourth-quarter sales
forecast. Intel's warning of a $600 million charge also did not help matters.
Capping the lid on investor's discontent was November's employment report.
Economists were looking for a greater rise in payrolls than the report was
able to deliver. "The two reports highlight that fundamentals are good, but
investors may have too high expectations of those fundamentals," commented
Richard Cripps, vice president of research at Legg Mason Wood Walker, to Dow
Jones Newswires. Perhaps the recent doses of reality will temper investors'
presumptions and allow for continued market growth on genuinely good news.
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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