By Anthony Palazzo and Mark Boslet
NEW YORK (Dow Jones)--Technology stocks rebounded for the fourth straight
session after Motorola Inc. (MOT) and Advanced Micro Devices Inc. (AMD)
reported better than expected earnings.
Although investors continued to hunt for bargains in the battered technology
sector, some market players said their bearish sentiments have not yet
disappeared.
''Obviously (tech stocks) were extremely oversold,'' said one trader.
He said the Advanced Micro report helped the market on Tuesday, as did
positive comments by Goldman Sachs & Co.'s chief U.S. strategist, Abby
Joseph Cohen, around midday. ''Before that I probably would have said we're
getting a little tired,'' the trader said.
The Nasdaq computer index rose another 1.1%, bringing the four-session
gain to 8.2%. Nevertheless, the index is still down 11.3% from an all-time
high set Jan. 22.
''My guess is we're probably okay for the next few days,'' the trader
added. But in the longer term, ''I think we're going to have some fits
and starts before we get going again,'' he said.
Roxane Googin, an analyst at Gruntal & Co., said she expects the market
to focus on first-quarter earnings reports through April. She said investors
will be listening very closely to the tone of follow-up conference calls
to pick up clues going forward.
Investors are also expecting the Federal Reserve Board to again raise
interest rates, adding to the already bearish outlook that's been created
by worries about earnings from International Business Machines Corp. (IBM)
and negative preannouncements from companies such as Informix Corp. (IFMX),
Cascade Communications Corp. (CSCC) and Fore Systems Inc. (FORE).
And with redemptions still plaguing some mutual funds, there may be less
money available for investment, and less liquidity for thinly traded stocks.
''This is not a sustainable rally,'' said one fund manager. ''I'm not
buying into it.''
But some managers maintain that there are some bargains to be found.
The March quarter often becomes an occasion for analysts to establish earnings
projections for the next year, and these projections often become the yardstick
for determining what price a stock deserves.
There will be technology companies that post good first-quarter results
and which will have encouraging prospects for 1998, said Robert Herwick,
president of Herwick Capital Management in San Francisco.
With ''valuation discipline,'' there will be an ''opportunity to do quite
well by buying the right stock,'' he said.
(END) DOW JONES NEWS 04-08-97
5:33 PM
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