It makes you wonder how long it will last...as soon as it goes up, it crashes again.
Nasdaq soars on tech charge
Benchmark issues push index to three-week high
By Rex Crum, CBS.MarketWatch.com
Last Update: 5:51 PM ET Feb. 18, 2003
NEW YORK (CBS.MW) -- Technology stocks put on one of their best performances in recent memory Tuesday after a new industry research report suggested personal-computer shipments are improving and signs emerged about a delay in any war with Iraq.
The tech-heavy Nasdaq Composite Index ($COMPQ: news, chart, profile) climbed 36.37 points, or nearly 3 percent, to close at 1,346.54, its best close since Jan. 29. Sector indexes also advanced, with the Philadelphia Semiconductor Index ($SOX: news, chart, profile) and the Amex Networking Index ($NWX: news, chart, profile) each gaining 4.1 percent.
The overall market showed strength on feelings that war with Iraq could be postponed following a weekend of massive anti-war rallies in the U.S. and around the world. See full story.
But tech stocks gave a direct boost to the market, in part because of new PC shipment estimates from Gartner Dataquest. The technology industry research firm said it expects first-quarter worldwide PC shipments to grow nearly 5 percent over the same period a year ago and reach 33.2 million units.
Gartner is also forecasting full-year shipments to hit nearly 139 million units, almost 8 percent more than the 128.5 million PCs shipped in 2002.
According to Gartner analyst George Shiffler, a "most likely case" scenario would show PC revenue for 2003 coming in at almost $172 billion, a 4.1 percent increase over 2002 revenue of $164 billion. Shiffler said price continues to be the driving factor affecting PC sales.
Shiffler added that the PC market could improve more than projected but only with the cooperation of certain forces outside the industry.
"If you got good results for the economy, and pickup of demand in the PC market, there will be less of a need for a cut in prices," Shiffler said. "We could see it if we get a quick resolution in Iraq and fairly strong economic recovery and we believe it will ignite a replacement cycle."
PC and hardware stocks responded by keeping up a healthy trading pace all day. Dell Computer (DELL: news, chart, profile) gained 72 cents to reach $26.49, Apple Computer (AAPL: news, chart, profile) rose 60 cents to close at $14.95, Hewlett-Packard (HPQ: news, chart, profile) added 65 cents to reach $18.44, IBM (IBM: news, chart, profile) gained $1.88 to close at $79.33 and Gateway (GTW: news, chart, profile) rose 9 cents to $2.19.
Other hardware stocks advancing included EMC (EMC: news, chart, profile), which gained 59 cents to close at $8.50; Network Appliance (NTAP: news, chart, profile), up 51 cents at $11.24; Sun Microsystems (SUNW: news, chart, profile), which rose 17 cents to $3.47; and Lexmark International (LXK: news, chart, profile), which climbed $1.76 to $60.92.
Silicon Graphics (SGI: news, chart, profile) had one of its best days of the year, as its stock rose 16 cents, or 14.3 percent, to $1.28 after the company said it had won the bulk of a $26 million Department of Defense contract to upgrade supercomputers at four military research bases.
Still, some analysts said that two days of solid gains does not mean there is reason to charge headfirst into the tech sector. Arnie Berman of Soundview Technology cautioned against making any "heroic bets" in the tech sector.
"The cyclical recovery, compelling as it promises to be, has not yet begun," Berman said. "Technology stocks are caught in an uncomfortable gearshift that has somehow left investors with a reasonably good taste in their mouths, yet with little to sink their teeth into."
Gains extend across all tech sectors
For whatever reasons, investors couldn't keep from buying into tech stocks Tuesday.
Among software makers, Microsoft (MSFT: news, chart, profile) rose 63 cents to $24.96, Oracle (ORCL: news, chart, profile) gained 72 cents to reach $12.42, Siebel Systems (SEBL: news, chart, profile) added 52 cents to close at $8.75, and PeopleSoft (PSFT: news, chart, profile) rose 56 cents to finish the day at $18.86.
BEA Systems (BEAS: news, chart, profile) climbed $1.19, or 11.5 percent, to $11.50 on reports that the company had inked a $1.2 million deal to sell software to General Electric (GE.: news, chart, profile). BEA is scheduled to report its fourth-quarter earnings after the market close on Wednesday.
Chip stocks got a boost from Intel (INTC: news, chart, profile), which rose 56 cents to close at $16.71. Intel officials said the world's No. 1 chipmaker would sink $2 billion into upgrading a plant in Chandler, Ariz., with new chipmaking technology.
Other chip-sector gainers included Applied Materials (AMAT: news, chart, profile), which rose 34 cents to close at $12.74; Xilinx (XLNX: news, chart, profile), up $1.17 to reach $22.09; and graphics chipmaker Nvidia (NVDA: news, chart, profile), which gained 69 cents to close at $12.73.
Lucent Technologies (LU: news, chart, profile) helped lift the networking sector after company officials reaffirmed the telecom equipment maker's second-quarter revenue forecast. Lucent shares rose 9 cents to close at $1.79.
Cisco Systems (CSCO: news, chart, profile) did even better, rising 63 cents to $14.31, while Juniper Networks (JNPR: news, chart, profile) added 46 cents to close at $9.16, Nortel Networks (NT: news, chart, profile) gained 10 cents to reach $2.41 and U.S.-traded issues of Alcatel (ALA: news, chart, profile) climbed 42 cents to $8. |
