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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Elwood P. Dowd who wrote (32576)	9/9/1998 4:45:00 PM
From: Roads End	Respond to of 97611

EL..Brighter future, I think so. Source courtesy:News.com Global PC sales rebounding By Stephanie Miles Staff Writer, CNET News.com September 9, 1998, 12:40 p.m. PT Global PC sales are on the rebound despite worldwide economic uncertainties, with iMac frenzy expected to double Apple's shipments while Dell continues to gain ground, according to a new report. Woldwide sales grew 11 percent last quarter, and are expected to grow 12.2 percent for the second half of 1998, with strong U.S. and European growth outweighing Asian and Russian instability. Most vendors have resolved the inventory gluts which led to fire-sale prices and shrinking margins in the first half of the year, according to market research firm International Data Corporation. Despite ongoing currency problems in Asian and more recently Eastern European markets, unit volumes and profit margins appear to be stabilizing. "It's warming up, relative to what was happening in the first half of the year. There's still some negatives in Asia and Russia, but that's a relatively small amount of worldwide sales," said Bruce Stephen, an IDC analyst. Also, while not breaking into the top five vendors yet, the most improved player of the second half of 1998 goes to Apple, according to IDC, as the momentum of the recently released iMac boosts sales figures for the second half of the year. "IDC believes that in Quarter 3 they will have the greatest share gain of anybody--including Dell--in terms of percentages," said Roger Kay, another IDC analyst. "They could double their shipments," because of iMac demand. Although still seventh in U.S. and worldwide sales, Kay predicts that the iMac will propel Apple into the top five in the U.S., and possible worldwide, next quarter. "There's very little cannibalism likely--the iMac doesn't really pitch to same market as its [G3 computers], so it is all additional business for them." Compaq, whose bloated inventory levels led to pricing cuts which reverberated throughout the industry, was number one worldwide and in the U.S., in terms of units shipped, Stephen said. "We think they'll get stronger, now that they've cleared up the inventory logjam which was disrupting their flow of business and led to radical pricing actions. We think they're coming back stronger." Compaq continues to face challenges from direct seller Dell, who has managed to resist getting mired in the sub-$1,000 price wars, posting more than 70 percent growth in unit shipments, year over year. "Dell still has tremendous momentum," Stephen noted. "They're kind of in a zone unto themselves." Hewlett-Packard also posted strong numbers, with almost 20 percent growth for the second half of 1998, fueled by momentum in the commercial market, Stephen said. The market wasn't rosy for every vendor, though. IBM slipped 4.1 percent, losing ground in the business market to Dell. Packard Bell NEC continued its downward spiral, posting negative 8 percent growth.

To: Elwood P. Dowd who wrote (32576)	9/9/1998 4:54:00 PM
From: Roads End	Respond to of 97611

EL..Japan reduced interest rates %50. We may not get anything that large but we could get 75 basis points and an ave SP PE of 22. Steve Lehman strategists see Fed easing, market rally by Stewart Winograd Stocks Editor Jeffrey Applegate, chief investment strategist at Lehman Bros., is recommending an asset allocation of 80% stocks, 20% bonds, and 0% cash -- the most bullish of 14 portfolio weightings recently reported by top Wall Street strategists. "We expect the Fed to ease the Federal Funds rate by 75 basis points in the next 12 months," Arum Kumar, senior equity strategist at Lehman Bros. and an associate of Applegate, told DTN Wednesday. Kumar said Lehman Bros. expects one easing of 25 basis points in the Federal Funds rate in the fourth quarter of 1998 and two more in 1999. (A basis point is 1/100th of a percentage point.) "The 30-year bond yield should fall to 5.0%," Kumar said. On Wednesday, the 30-year yield was 5.27%. "Given that scenario, we think that price-earnings multiples can get to 22, based on forward earnings, by the end of this year," Kumar said. "Using that target, we expect the S&P 500 to reach 1150 by the end of the year, and 1250 by year-end 1999," Kumar said. "Equivalent prices are 9000 for the Dow industrials by year-end, and 9700 in 1999." "Therefore, expected returns between now and the end of the year are 15% for stocks, 3% for bonds, and about 2% for cash," Kumar said. "Based on that, we recommend that investors be heavily weighted in stocks," he said.