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

To: barber who wrote (40059)	12/15/1998 3:20:00 PM
From: Elwood P. Dowd	Respond to of 97611

Semiconductors stage a comeback PC sales look strong, boosting hardware makers By Tiare Rath, CBS MarketWatch Last Update: 2:34 PM ET Dec 15, 1998 Tech Report NewsWatch SAN FRANCISCO (CBS.MW) -- Semiconductor and personal computer stocks snapped back Tuesday, on optimism about PC sales and a strong upcoming quarter from chip-industry giants, according to an industry analyst. Chip stocks, which were obliterated in a heavy sell-off Monday, led the way back Tuesday. The Philadelphia Semiconductor Index rose 1.9 percent vs. 1.1 percent gains in the Nasdaq. Computer stocks also performed well, with the Goldman Sachs Computer Hardware Index rallying up 1.1 percent. See Silicon Stocks BT Alex. Brown analyst Erika Klauer said hardware and semiconductor stocks are performing well because investors believe the companies' fundamentals are strong. Personal computer buying is not only expected to be healthy, but commercial sales look good as well, she said. "Earnings I think are going to be very strong in the big technology companies," Klauer said. That's fueled rallies in stocks like Compaq (CPQ), IBM (IBM) and Gateway (GTW). Tuesday, Compaq's shares rose 1/2 to 41 3/8; IBM's issues advanced 1/2 to 163 3/8; and Gateway's stock rose 1 3/4 to 51 3/16. PC bellwether Dell (DELL) fell 1/16 to 64 11/16. Positive vibes from PC makers are also spilling down to semiconductor companies, many of which make chips and processors that help the computers run. Profits from Intel (INTC) and Advanced MicroDevices (AMD) look particularly good, Klauer said. Intel's shares gained 2 3/4 to 114 3/8, while AMD's stock was unchanged at 28 9/16. In addition, National Semiconductor (NSM) rallied after shares took a nasty hit Monday. Tuesday, the stock gained 13/16, or 6 percent, to 14 7/16. Investors are likely buying into the stock because it's cheap, Klauer contended. "You are seeing a little bit of bottom-fishing," she said. The stock has been volatile since the company released better-than-expected earnings last week and analysts raised estimates. Most investment firms on Wall Street have stopped short of recommending National Semi's stock, however. "They have a lot more proving to do," Klauer said. "They unfortunately have developed a poor reputation for execution." Other chip stocks outperforming the Philadelphia Semiconductor Index included Applied Materials (AMAT), which rose 1 3/4 to 40 7/8; Analog Devices (ADI), which gained 1 to 26 1/8; and Novellus Systems (NVLS), which advanced 2 1/2 to 50 1/8.