Analyst Sees Decline In Tourism, Rise In IT Spending
14 Sep 12:46
By Michelle Rama
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Bear Stearns & Co. analysts said the attack on the
World Trade Center will hurt the hotel and travel industry, while the
information technology industry will feel the negative effects at first but
should later benefit from the need to rebuild.
Jason Ader, gaming, lodging and leisure analyst, said travel and tourism will
be one of the economy's hardest-hit industries. While it's too soon to tell
what the terrorist act's financial impact will be on the tourism industry, it
will vary, ranging from "manageable" to "significant."
He mentioned the airline industry as one that "expects to face record
losses." The airline industry lost about $1 billion dollars the day following
the disaster, when air traffic was halted due to fear of further terrorist
actions.
"The economic disruption and the psychological scars will take much longer to
heal, and we believe it will be some time before travel volume approaches
anything close to 'normal levels,' " Ader said.
Ader expects difficulty in the coming quarters for the gaming sector, though,
he said, it is more "insulated" from the fallout from the attack than other
leisure industries. He sees a greater impact on Las Vegas than on Atlantic
City, as half of Las Vegas's visitors fly there and rely on air travel more
than visitors to Atlantic City do.
The semiconductor industry faces near-term difficulty due to its inability to
transport its products by air lately. But it should benefit from increased
military spending and spending by financial firms that need to rebuild their
information technology infrastructure, Bear Stearns analyst Charles Boucher
said in the note.
Among the equipment the military and intelligence communities will need are
electronic, surveillance equipment, and data processing equipment. Rebuilding
downtown Manhattan's financial firms will take enterprise hardware such as PC's
servers and network equipment, Boucher said.
He recommends buying, "on weakness," stocks in such companies as Intel Corp.
(INTC), Texas Instruments Inc. (TXN), LSI Logic Corp. (LSI), Cypress
Semiconductor Corp. (CY), National Semiconductor Corp. (NSM), Triquint
Semiconductor Inc. (TQNT), Altera Corp. (ALTR), Lattice Semiconductor Corp.
(LSCC) and Xilinx Inc. (XLNX).
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