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Strategies & Market Trends : Trend Setters and Range Riders -- Ignore unavailable to you. Want to Upgrade?

To: SusieQ1065 who wrote (722)	6/12/2001 12:08:28 PM
From: 2MAR$	Respond to of 26752

DELL didn't help ...

To: SusieQ1065 who wrote (722)	6/12/2001 12:23:16 PM
From: 2MAR$	Read Replies (1) \| Respond to of 26752

Nokia Warning Seen Deathknell For Tech Stock Recovery By Toby Sterling Of DOW JONES NEWSWIRES AMSTERDAM (Dow Jones)--Technology and telecommunications shares around Europe fell Tuesday after Finnish telecoms equipment maker Nokia (NOK) warned it will miss its second quarter sales estimates, saying that the U.S. economic slowdown has extended to Europe "and to the wireless telecommunications industry as a whole." Nokia said sales will grow by 10% from a year earlier, not 20%, while world handset growth will be "very modest" and that investment in networks would also be affected. In early reactions to the news, market watchers said that the warning looks like the end of the small recovery in technology shares since April. "Nokia used to be a stock that could carry the market for a whole day," said fund manager Lex Werkheim of Eureffect. "It was one of the few exceptions that was giving some confidence to the market. Now that is gone." Analysts said that Nokia's warning was bad news for the telecommunications foodchain, from handset makers such as Siemens (G.SIE), to network equipment makers like Ericsson (ERICY), to component makers like Philips (PHG), to cash-strapped wireless telephony service providers such as Royal KPN NV (KPN). Companies with activities in more than one of those categories were seen as the worst off. "Nokia has the best control of its business," said ING Barings analyst Hendrik Zonnenberg, "If they are hard hit, I expect Ericsson, Siemens, and Motorola (MOT) to be hit harder." UBS Warburg analyst Russ Mould said that Nokia's major semiconductor suppliers STMicroelectronics (STM) and Epcos AG (EPC) would be hardest hit among chip-makers, though he also cited Siemen's unit Infineon (IFX) and Royal Philips Electronics NV (PHG) "because they are both wireless-exposed and Nokia is probably one of the top three customers for their semiconductor activities," Mould said. Philips also makes chips for Ericsson and is the market leader in making screens for cellular phones. Christian Riefers,analyst with Delbreuck Asset Management in Frankfurt, noted that part of the reason for the slowdown in handset sales is that cash-strapped telecommunications companies have scaled back marketing campaigns and cut subsidies for handsets, leading to a slowdown in consumer demand. Riefers and several other analysts said that one of the most significant effects of the warning may be that Nokia is no longer seen bullet-proof or as having superior insight into markets. "It may even be a bit relieving for (companies) to know that Nokia is in the same boat," said analyst Micael Bahlmann of M.M. Warburg in Hamburg. Jussi Hyoty, an analyst with FIM Securities in Helsinki, says Nokia's guidance on global handset sales now seems to be in line with other handset makers and suppliers. "Now I think we have a pretty good idea where the market is," he said. Siemens, Philips and French handset maker Alcatel Alsthom SA (ALA), among others, have given forecasts similar to that of Nokia's amended view in recent weeks. In New York around noon EST, Nokia's shares were down $5.81 or 20% at $22.90. Ericsson down 36 cents or 6.5% at $5.14; Motorola down $1.19 or 8% at $13.87; Siemens down $3.61 or 5% at $67.67; Infineon down $2.11 or 6.1% at $32.53; Philips down $1.33 or 4.8% at $26.29; STM down $2.91 or 7.9% at $34.18; Epcoss off $2.80 or 4.5% at $59.30; Alcatel down $1.16 or 4.7% at $23.80; and KPN down 43 cents or 7% at $5.60. -By Toby Sterling, Dow Jones Newswires: 31-20-626-0770; toby.sterling@dowjones.com (END) DOW JONES NEWS 06-12-01 12:22 PM * end of story *