Last week, a softening of tone from the Fed and Taiwan Semiconductor sent
tech stocks in circles. As expected, the Fed kept interest rates at 1% and
said that it foresees rates remaining low for a "considerable period." Still,
investors were not comforted by this sentiment. "The Fed is preparing us for
an eventual shift," said Sharon Lee Stark, chief bond strategist at Legg
Mason, to The Wall Street Journal. However, investors took solace later in the
week, after the FOMC's minutes from its October meeting suggested that
interest rates could remain low for much longer than many had anticipated. On
the corporate front, a lackluster November sales report from Taiwan
Semiconductor Manufacturing sent chip issues spiraling. However, the world's
largest contract microchip maker later said that its fourth-quarter sales
would hit a record and beat forecasts, thereby redeeming the grace of semi
issues. Meanwhile, chip firms Atmel and TriQuint Semi surged after raising
their quarterly outlooks on stronger demand. Elsewhere in the tech space, EMC
lifted its fourth-quarter sales forecast, while software maker Adobe Systems'
quarterly profit doubled from last year. Still, Ciena plunged after reporting
a loss for the quarter. Also of note last week, a Gartner and SoundView
Technology Group survey of 600 technology purchasers provided a spending
forecast for the sector. Overall, technology-spending budgets are expected to
increase by a disappointing 1.6%. Arnie Berman, chief technology strategist at
SoundView, said in reference to the survey during a Webcast, "Spending
confidence is lagging business confidence." The bulk of spending does not
appear to occur until the final fourth quarter and small- and medium-size
businesses look set to lead the buying action. This week, investors will sift
through a generous amount of financial results and most likely zero in on
Oracle.
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
back to top
