NEWS TONITE (Read down a bit...SIGNIFICANT ON ASCEND):
(COMTEX) Techs may catch fallout from Motorola
Techs may catch fallout from Motorola
Washington, DC, SEP. 11 (The Content Factory) - NEW YORK (DBC) -- An
earnings warning from Motorola may nullify Thursday's late rally in
technology stocks, which was led by a surging software group. Investors
also will be watching for inflationary signals in economic reports due
Friday.
Motorola said third-quarter profits for the period would
"significantly" trail Wall Street estimates of 60 cents per share.
Shares dropped 8 3/8 at 66 in after-market trading. See DBC's Tech
Report
Earlier, the CBOE Computer Software Index rose 1.6 percent, the
Philadelphia Semiconductor Index 1.1 percent, the High Tech 35 Morgan
Stanley Index 0.4 percent. On the downside, the Goldman Sachs computer
index fell 0.1 percent on concern over how the strong dollar will
affect revenue from overseas. See: DBC Report
More broadly, the Pacific Stock Exchange Technology Index gained 0.5
percent, while the tech-laden Nasdaq Composite was little changed at
1639.
Adobe Systems Inc. rose 3 5/8 to 44 5/8 after the software developer
said third-quarter earnings would probably surpass Wall Street
estimates of 49 cents per share. Computer Associates rose 1 11/16 to 66
3/4 in a delayed reaction to PaineWebber's Wednesday initiation of
coverage at "buy."
Microsoft added 1 3/4 to 136 7/8.
In the semiconductor group, equipment makers rebounded from the
previous session's drop, continuing a week-long bout of volatility, as
Novellus 2 7/8 to 110 1/4, Kulicke & Soffa 2 3/4 to 57 1/4, Lam
Research 1 to 56 3/8, and ASM Lithography 1 1/4 to 92.
Robertson Stephens analyst Sue Billat said the recent volatility
among equipment manufacturers is mostly a result of the group's recent
run-up, and that third-quarter new orders "are accelerating." Among
several "buy" recommendations she has in the group, she is particularly
impressed by ASM Lithography and Applied Materials. "I think they are
both gaining market share, and both firing on all cylinders when it
comes to their product strategies and execution," she said.
Ascend Communications fell 2 1/8 to 37 7/8 on volume of more than 27
million shares after Salomon Bros. downgraded the computer networkin
company to "hold" from "buy" and dropped its 1997 earnings estimate
$1.22 per share from $1.31, and its 1998 forecast to $1.60 from $1.8
Goldman Sachs cut its third-quarter estimate to 31 cents per share f
36 cents, and its fourth-quarter target to 35 cents from 40 cents. 3
slipped 5/8 to 49 1/8, Cisco Systems 1/4 to 72 1/4, and Citrix 2 3/8
50. See DBC's Tech Report
Utendahl Capital Partners analyst Michael Davies said his favorite
plays in the networking sector are 3Com, Cisco and Ascend. "I think it
has become more competitive [in the industry], with 3Com and U.S.
Robotics teaming up; they will now be the largest player in the acce
concentrator business if you combine the two market shares together,
he said.
Davies called Ascend "one of the best-positioned players in this arena." "Certainly the
growth in the internet is still very viable, and a few of the ISPs have got the plans in
place to really grow the
infrastructure, and I think Ascend will receive a decent portion of
that business."
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Copyright 1997 The Content Factory
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Gary Korn |
