Stocks on Move: Dell Continues to Crush Gateway and HP
By Elizabeth S. Armbuster
Stocks rose early Friday. Retail sales climbed 1.1% in June, fueled mainly by auto sales, the Commerce Department said. Excluding car sales, retail sales increased 0.4%. The Dow Jones Industrial Average gained three points to 8,805. The Nasdaq Composite index climbed 21 points, or 1.5%, to 1,395. The S&P 500 index added two points to 930.
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Leaders
Computer company Dell Computer (Nasdaq: DELL - News) climbed 6.7% to $25.53 after slightly raising its forecast for the second quarter, which ends in August. Management said it will earn about $0.19 per share on sales of $8.3 billion in the quarter, and reiterated its belief that it is gaining market share. Dell continues to crush industry peers Gateway (NYSE: GTW - News) and Hewlett- Packard (NYSE: HPQ - News), said Morningstar senior stock analyst Joseph Beaulieu. Dell's doing the best it can given the weak demand for PCs industrywide, Beaulieu said. The jump in the shares today shows investors will cling to any bit of good news, he said. Dell trades roughly in line with Morningstar's fair value estimate of $26.
Laggards
Business software maker SAP (NYSE: SAP - News) fell 4% to $18.91 after an analyst from investment firm UBS Warburg downgraded the shares. On Thursday management warned that second-quarter and full-year sales will be lower than expected. Total 2002 revenue will increase between 5% and 10%, instead of the firm's original projection of 15%. The company was counting on a recovery in information-technology spending later this year, and chances for this appear slim, said Morningstar stock analyst Mike Trigg. Before considering the stock, investors should wait for a wide margin of safety below Morningstar's fair value of $20, Trigg said.
Prices as of 10:05 a.m. Central time. See current prices.
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