Tech stocks sluggishly entered last week, but came out in the black. Early
on, a weaker dollar, which fell to new lows against the euro, did not seem to
bode well for tech issues. "It looks like we're having a big shift out of the
Nasdaq names and into more of the cyclical names," commented Robert Mikkelsen,
managing director of institutional sales and trading at The Advest Group, to
Reuters News. "I think that's representative of the dollar." Still, pockets of
strength within the sector began to build momentum. Oracle posted a higher
profit and promised better-than-expected revenue growth in the current
quarter. "Oracle's quarter represents the most significant evidence of
improving demand for corporate software that we have seen so far this
recovery," said Morgan Stanley analyst Gary Rollo, in a Reuters news piece.
The Street also cheered Motorola's decision to hire Edward J. Zander, an ex-
Sun Microsystems executive, to head up the firm. "This move tells people there
is some opportunity in Motorola's story," said Ryan Casey, a Wells Fargo
Securities analyst, to Dow Jones Newswires. The cell-phone maker rose 2% on
the news. Elsewhere, Jabil Circuit and Red Hat rallied on impressive quarterly
results, while Cypress Semiconductor also benefited on a better fourth-quarter
forecast. 3Com's observation that demand is improving for networking equipment
also supported tech issues. Brian Pears, head of equity trading at Victory
Capital Management, told Reuters News that investors are trying to take
advantage of the Nasdaq's recent trail behind the broader market, "Unlike most
of this month, you've got the Nasdaq outperforming the Dow and the S&P . . .
Traders are looking to take advantage of what they perceive as a short-term
opportunity in the Nasdaq." With that in mind, a Santa rally for tech stocks
may soon be presented.
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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