Techs Rally As Investors Say It Can't Get Worse
Tuesday March 6 1:08 PM ET
By Timna Tanners
LOS ANGELES (Reuters) - Technology stocks surged on Tuesday, rebounding from a steady drop since hitting record highs a year ago, as many investors decided that business conditions could not get any worse, analysts said.
``I think the consensus is the Nasdaq is drastically oversold,'' said Brian Slater, fund manager with Condor Capital in Martinsville, N.J.
The tech-heavy Nasdaq composite index rose 3.7 percent or 79 points to 2,222 in early-afternoon trading.
Industry shares have fallen sharply as nearly all technology sectors suffered from weaker sales and order cancellations amid the economic slowdown. The Nasdaq rebound came amid growing sentiment that perhaps economic conditions could not get any worse, analysts said.
Slater noted that software giant Oracle Corp.'s (NasdaqNM:ORCL - news) earnings warning last week and the failure of the Federal Reserve (news - web sites) Open Market Committee to lower interest rates led to a sell-off in which stock values likely hit bottom.
``We think to sell in this market is a mistake,'' Slater said. ``I think long-term companies will do what it takes to spend on technology to remain competitive.''
The Nasdaq appeared to shrug off earnings warnings in the semiconductor industry, after Xilinx Inc. (NasdaqNM:XLNX - news), Varian Semiconductor Equipment Associates Inc. (NasdaqNM:VSEA - news) and TriQuint Semiconductor Inc. lowered sales (NasdaqNM:TQNT - news) estimates.
Shares of Xilinx rose 8.4 percent or $3-5/8 to $46-7/8, while Varian was up 12 percent or $3-3/4 to $35-1/4 and Triquint rose 12 percent or $2-5/16 to $21-5/16, all in early-afternoon Nasdaq trading.
Meanwhile, Dell Computer Corp. (NasdaqNM:DELL - news) got a boost after Merrill Lynch analyst Steve Fortuna gave a sunny forecast on Monday for the stock after meeting with the company's management.
``We strongly believe that in this no-demand environment Dell is positioned extremely well to outshine the competition,'' he wrote in a report.
The second most traded stock on the Nasdaq, Dell rose $2-5/8 or 11 percent to $26-1/16.
Software stocks also gained ground, lead by Oracle and Microsoft Corp. (NasdaqNM:MSFT - news). Oracle gained 4.4 percent or 3/4 to $17-3/4 and Microsoft rose $1-13/16 or 3.2 percent to $59-1/4.
Veritas Software Corp. (NasdaqNM:VRTS - news) gained 10.9 percent or $6-1/2 to $66-5/16, the day after it bucked the recent trend and reaffirmed its expectations for earnings. Also stronger was Web software company BEA Systems Inc. (NasdaqNM:BEAS - news), which rose 9 percent or $3-5/32 to $37-31/32.
By Timna Tanners
LOS ANGELES (Reuters) - Technology stocks surged on Tuesday, rebounding from a steady drop since hitting record highs a year ago, as many investors decided that business conditions could not get any worse, analysts said.
``I think the consensus is the Nasdaq is drastically oversold,'' said Brian Slater, fund manager with Condor Capital in Martinsville, N.J.
The tech-heavy Nasdaq composite index rose 3.7 percent or 79 points to 2,222 in early-afternoon trading.
Industry shares have fallen sharply as nearly all technology sectors suffered from weaker sales and order cancellations amid the economic slowdown. The Nasdaq rebound came amid growing sentiment that perhaps economic conditions could not get any worse, analysts said.
Slater noted that software giant Oracle Corp.'s (NasdaqNM:ORCL - news) earnings warning last week and the failure of the Federal Reserve (news - web sites) Open Market Committee to lower interest rates led to a sell-off in which stock values likely hit bottom.
``We think to sell in this market is a mistake,'' Slater said. ``I think long-term companies will do what it takes to spend on technology to remain competitive.''
The Nasdaq appeared to shrug off earnings warnings in the semiconductor industry, after Xilinx Inc. (NasdaqNM:XLNX - news), Varian Semiconductor Equipment Associates Inc. (NasdaqNM:VSEA - news) and TriQuint Semiconductor Inc. lowered sales (NasdaqNM:TQNT - news) estimates.
Shares of Xilinx rose 8.4 percent or $3-5/8 to $46-7/8, while Varian was up 12 percent or $3-3/4 to $35-1/4 and Triquint rose 12 percent or $2-5/16 to $21-5/16, all in early-afternoon Nasdaq trading.
Meanwhile, Dell Computer Corp. (NasdaqNM:DELL - news) got a boost after Merrill Lynch analyst Steve Fortuna gave a sunny forecast on Monday for the stock after meeting with the company's management.
``We strongly believe that in this no-demand environment Dell is positioned extremely well to outshine the competition,'' he wrote in a report.
The second most traded stock on the Nasdaq, Dell rose $2-5/8 or 11 percent to $26-1/16.
Software stocks also gained ground, lead by Oracle and Microsoft Corp. (NasdaqNM:MSFT - news). Oracle gained 4.4 percent or 3/4 to $17-3/4 and Microsoft rose $1-13/16 or 3.2 percent to $59-1/4.
Veritas Software Corp. (NasdaqNM:VRTS - news) gained 10.9 percent or $6-1/2 to $66-5/16, the day after it bucked the recent trend and reaffirmed its expectations for earnings. Also stronger was Web software company BEA Systems Inc. (NasdaqNM:BEAS - news), which rose 9 percent or $3-5/32 to $37-31/32. |
