Tech stocks up with help from Intel and VMware
Tech stocks received a boost with Intel and VMware leading the charge along with IBM. Apple, Cisco Systems, and Hewlett-Packard have yet to report, but Apple's iPad has been accused of hurting personal computer sales.
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Concerns that the growing popularity of Apple's iPad is hurting personal computer sales, as well as the disruption to the global supply chain from Japan's earthquake, had walloped bellwether tech stocks in recent weeks.
"Expectations for this quarter -- despite the fact there were no pronouncements -- were low. There were concerns about semiconductor inventories, the decline in PC shipments or the competition from the iPad on PC shipments," said Tim Ghriskey, chief investment officer at Solaris Asset Management.
"The (stock index) futures are pointing to a stronger opening and that is really as a result of the strong earnings primarily from technology companies we saw after the close," he said.
Fund managers have sold down sector bellwethers since Japan's March 11 disaster, fearing worse-than-expected damage to margins as they battle to secure critical components from a country that supplies 14 percent of the world's electronics.
But with Intel's revenue forecasts for this quarter shattering expectations and defying fears of a slowdown in global PC sales, relieved investors piled back into the chipmaker's shares and other possibly oversold stocks.
Though some say the PC market looks better after Intel's report, the jury is still out on its longer term prospects. And Intel remains far behind Britain's ARM Holdings in designing mobile processors.
"Everybody, including myself, was overly pessimistic in the near term," said Roth Capital Partners analyst Arnab Chanda. "But the issues are still not resolved unless they tell us, 'Hey, we got four design wins on Tier 1 (high profile) handsets.'"
VMware, which specializes in helping corporations set up virtual computer hardware and software networks, also surprised Wall Street with evidence of a surge in corporations upgrading equipment as they emerged from recession.
VMware surged 10 percent and Intel climbed 4 percent. But IBM held steady as some investors had hoped for IBM to raise its full-year forecasts even more than they did.