Wall Street Beat: IT heavyweights look ahead
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(InfoWorld) - Heading toward the end of a better-than-expected year for IT, the good news this week was that there were no big surprises when Hewlett-Packard, Cisco Systems, and Advanced Micro Devices laid out strategies at investor and analyst conferences. While IT product prices, especially in hardware sectors like chips and some types of networking equipment, have been under pressure, tech vendor sales have been strong generally. The Nasdaq Composite Index, home to a broad range of publicly traded IT companies, crossed 2400 in November and has remained at that level, after opening the year at 2244. Tuesday's U.S. Federal Reserve decision to leave rates unchanged, and a much better-than-expected report on retail sales Wednesday stoked markets overall. On Thursday the Dow Jones Industrial Average hit a new intraday high of 12427.17, and the Nasdaq surged by 21.44 points to close at 2453.85. AMD gave assurancesÂ Thursday at an analyst meeting in New York that its $5.4 billion merger with graphics chip maker ATI will result in greater-than-expected cost savings in 2007, and $80 million to $160 million in incremental revenue. This caused AMD shares to jump by $2.54 to close at $22.71. The company also stressed that it expects a revenue boost from Microsoft's Vista OS release. The company in OctoberÂ announced fourth quarter resultsÂ that beat analyst estimates, but there were concerns about profit margins. The challenge for AMD is to keep a lid on costs and continue to successfully challenge Intel, especially with quad-core products in 2007. At HP's meeting in New York Tuesday, Chief Financial Officer Robert Wayman said thatÂ the company is forecastingÂ fiscal 2008 revenue between $101 billion and $103 billion. The high side of that is slightly higher than the consensus analyst forecast of $102 billion, according to Thomson First Call. It was reassuring but not exciting, at the tail end of a great year from HP (despite theÂ board spying scandalÂ that cost Chairman Patricia Dunn her job in September). The day of the analyst meeting, HP shares (HPQ) closed at $39.83, down by $0.18. But HP's announcement with MicrosoftÂ on WednesdayÂ helped spark investor interest. The deal calls for the companies to work on a range of business software products to the enterprise market, including business intelligence software. HP closed Thursday at $39.91, up $0.19 for the day. At Cisco's C-Scape conference for analysts this week in San Jose, California the company stressed themes that it had hit earlier this year. The company says it will sustain double-digit growth through the rest of the decade by incorporating data, voice, video and mobile capabilities -- its "quadruple play" -- across product lines. This week, the companyÂ focused on the consumer sideÂ of the equation, spotlighting itsÂ merger with set-top box maker Scientific-Atlanta, and also its Linksys consumer gear. Cisco plans to maintain its stronghold in the enterprise while continuing to grow in the consumer market. By the second day of the conference, Cisco shares (CSCO) were up $0.14 from its close Monday. In the current upbeat climate, reassurances from IT heavyweights about the next few quarters could be enough to boost IT investor confidence into the new year.
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NEW YORK  -Stock index futures were little changed  on Monday as concerns about the health of the global economy  nagged, while technology shares could be in focus with Yahoo  Inc expected to reject a takeover bid from Microsoft Corp.
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Wall Street was set for a steady start on Thursday as investors tune in to more merger talk in telecoms ahead of key data and earnings from computer maker Dell  that may shape sentiment in the technology sector.
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Reorders, recorders, and red borders will have starring roles in next week's Wall Street epic.
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As earnings reports rolled in from technology bellwethers, including Microsoft, Apple, Nokia, and Motorola, worries about the economy continued to overshadow good news this week.The fourth quarter of 2007 was strong for IT sales, but a downturn in the U.S. economy, which many analysts fear is slipping into recession, is undermining investor confidence in the sector. Share prices of technology companies have dropped since the start of the year, with the Nasdaq Composite Index sinking to pre-2007 levels.Microsoft provided some cheer Thursday, reporting a strong quarter for core products such as Windows Vista and Office 2007. Revenue for the quarter increased 30 percent year over year to $16.37 billion.Just as important as many market observers fear the U.S. is entering a recession that will affect technology, Microsoft also raised its forecast for its fiscal year, which ends June 30. Noting that Office and video game sales are doing better than expected, the company said it expects revenue for its fiscal year in the range of $59.9 billion to $60.5 billion. Three months ago, the forecast was $58.8 billion to $59.7 billion.The report, however, provided only a momentary uptick in Microsoft shares and the Nasdaq, even though other news on the software front was good.Enterprise database vendor Sybase, for example, said Thursday that it had its first billion-dollar sales year in seven years, helped by a 15 percent jump in revenue for the fourth quarter to $295.2 million. What&#39;s more, its forecast for this quarter remains strong.&quot;We have a balance in our product portfolio and a balance geographically as well,&quot; said company Chief Marketing Officer Raj Nathan.Though Sybase has a stronghold in the financial vertical market -- a sector that is in trouble -- Nathan pointed out that the company is strong in the telecom arena as well, does about 50 percent of its business outside the U.S., and is developing new analytics products that will help financial companies manage risk and do program trading.The company was one of the few that ended the week on a happy note with its share price increasing by $0.56 to close Friday at $27.44.Other companies did not fare so well, as investors jumped on any scrap of bad news.&#160;Apple got hit hard even though it reported quarterly revenue of $9.6 billion, a whopping 35 percent year-over-year increase. Investors were spooked about slowing iPod sales and a weak forecast for this quarter. iPod shipments of 22.1 million were about 10 percent below what had been expected.Apple shares plunged, dropping from $161.36 last Friday to $130.01 this Friday.Motorola had a rough week, reporting Tuesday an 84 percent plunge in income for the fourth quarter&#160;to $100 million and warning that its market-share losses would continue as the U.S. market -- the company&#39;s cell-phone stronghold -- continues to slump until next year. Company shares dropped $2.27 to hit $10.05 Wednesday on the news, and stayed below $11 through the week.&quot;Management&#39;s view of [a] recovery being a 2009 event pushes the recovery further past the horizon most investors are willing to hear at this point,&quot; said Citigroup Global Markets in a research report.Nokia, with hit products and a strong presence in Asia, on Thursday reported a 44 percent rise in profit for the fourth quarter, to &#8364;1.84 billion ($2.7 billion), on a 34 percent sales increase. A slump in U.S. sales was more than offset elsewhere. Nokia shares jumped Thursday on the news, rising $4.05 to close at $36.48 -- and then fell right back down Friday after IDC issued a report that suggested Nokia&#39;s confidence in 2008 was misplaced.In an economy that has investors focusing on the bad news, it&#39;s going to take some evidence of strong sales in the current quarter to bring confidence -- and tech share prices -- back up to where they were. The Nasdaq finished 2007 up by 9.8 percent, but in the first four weeks of this year, last year&#39;s gain has been wiped out with the index closing Friday almost 300 points down from the end of December.
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Software companies are poised to post  strong December quarter earnings in the next two weeks, boosted  by pent-up demand and a weak dollar, but high valuations and a  tough year ahead might rein in stock prices, analysts say.
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Wall Street was set for a steady start  on Thursday as investors tune in to more merger talk in  telecoms ahead of key data and earnings from computer maker  Dell DELL.O that may shape sentiment in the technology  sector.
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Most U.S. companies have reported earnings and the flow of economic data slows this week, so investors will look to U.S. trade figures and earnings from leading technology stocks Dell and Cisco for fuel to sustain the market's 2-week-old rally.
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SHARES are set for a bumpy ride after Wall Street lost ground on the weekend, derailed by weak US jobs data and a poor prognosis from Intel which sparked worries for the health of the tech sector.
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It's been a strong week for tech offerings, and the momentum may continue.
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Stock investors may want to fasten their seatbelts for the week ahead, when a flurry of  earnings and economic data will once again be in focus.
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The Dow Jones Industrialsâ¦the NASDAQ Compositeâ¦the S &amp; P 500â¦The Russell 2000â¦ The list of stock market indexes goes on and on.
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Wall Street was set for a soft start on  Friday as rosy results from Internet search engine Google  GOOG.O fails to dispel disappointment over software giant  Microsoft's MSFT.O downbeat outlook.
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Wall Street was set for a flat start on  Thursday but stellar results from Apple Computer AAPL.O will  underpin the technology sector ahead of earnings from network  computer maker Sun Microsystems SUNW.O.
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Flakes, food, and films will have starring roles in next week's Wall Street epic.
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Mixed economic news and forecasts of weak IT spending for at least the beginning of next year caused IT investor confidence to waver this week, though upbeat analyst presentations from Cisco and AT&amp;T and online e-commerce figures brought some cheer to the holiday season.Macroeconomic news is making technology investors uneasy. Wednesday morning, the U.S. Federal Reserve Board cut its federal funds rate in an attempt to allay fears that turmoil in the housing market would wreak further havoc in financial markets. But the move (a cut of 25 basis points) was not as great as some market observers hoped for and sent the tech-heavy Nasdaq Composite Index into a decline.Uncertainty in the U.S. is depressing IT spending forecasts. &quot;The economic slowdown we see happening in the U.S. will in fact translate over to slower growth in the U.S. IT spending market,&quot; said Andrew Bartels, principal analyst at Forrester Research, on a Thursday conference call with media and analysts.The good news, Bartels said, is that globally, IT capital spending should remain strong, U.S. spending should pick up again by the fourth quarter of 2008, and a real recession will likely be avoided.ComScore, meanwhile, had good news about online spending. Almost $19 billion was spent online during the holiday season up to midweek, an 18 percent increase compared to the same period in 2006, the market research company said.Companies that appear ready to supply the infrastructure for e-commerce and Web 2.0 multimedia services gave investors something to cheer about this week.AT&amp;T, which is melding the telecom services and infrastructure of the former SB Communications, BellSouth, and the old AT&amp;T, gave a presentation that impressed analysts Tuesday, convincing many that the communications giant is poised to leverage a wide range of assets.In a research note, Christopher King of investment firm Stifel Nicolaus said that AT&amp;T has &quot;the premier set of assets in the telecom industry.&quot; Independent analyst Jeff Kagan noted in an e-mail report that &quot;10 years ago, the company was only into the local phone business and was just getting into long distance and DSL. Today, it is a full featured company offering local and long-distance telephone, wireless, high-speed internet, and even television.&quot;The presentation came a day after AT&amp;T announced that it has expanded its 40G IP/MPLS backbone network to more than 50,000 miles in the U.S.AT&amp;T shares closed at $39.46 Tuesday, up by $1.56, and continued to move up over the next few days.Cisco&#39;s analyst presentation on Tuesday also drew good reviews. The company has a good track record of predicting trends and executing product strategy accordingly. The company announced, for example, that&#160;it will debut next year its Entertainment Operating System (EOS), a platform for multimedia content for online communities. Its unified communications product strategy and expected enhancements to its software offerings should also make its product suite more central to the corporate data center.Lehman Brothers sent out a research note saying that the company is well-positioned to offer products supporting the new generation of Web technologies. Cisco shares rose $0.46 to close at $28.08 Tuesday, and continued to move up during the week.In a shaky economy not all companies and sectors will perform well, and big questions surrounded chip maker AMD at its analyst presentation Thursday. The problematic launch of its Barcelona quad-core chips, which are still experiencing production delays, has shaken confidence that the company can make an effective counterpunch against Intel.Company CEO Hector Ruiz said that the company should break even by the second quarter of 2008, helped by -- among other things -- new graphics chips. But analysts are worried that may be too little, too late, to stop a market share slide. With product sales in doubt, the promise of cost controls was not enough to win over investors. AMD shares declined by $0.13 to close at $8.84 Thursday.
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Mergers and acquisitions and several strong financial reports excited IT investors this week, even as concerns about the U.S. economy continue to roil the stock market.