Technology Earnings Under Microscope

High-tech stocks this week can either turn the power back on for Wall Street, or pull the plug on the great bull market of the '90s.

They gave the market its sizzle for the last two years, with a surge of unexpectedly strong earnings, but then turned static in 1997.

A number of important technology companies report earnings this week. And those results should signal whether the stock market is currently just correcting, or headed for bear country.

One thing's clear. Many investors expect the worst.

A glut in semiconductors last year and sluggish computer buying among consumers more recently have sent high-tech stocks plunging.

They're off 13 percent from their all-time highs in January, as measured by the tech-heavy Nasdaq composite index. By comparison, the Dow Jones industrial average is off 9.8 percent from its month-ago peak.

This week brings first-quarter earnings reports from the likes of Texas Instruments, Compaq Computer, and Apple Computer.

Two stocks will get particular scrutiny.

Today Intel Corp. - the world's leading chipmaker - releases its earnings after its stock plunged 11 percent in three days last week. Investors worry that newly energized rivals will chip away at Intel's market, forcing big price cuts in its Pentium chips.

The other high-tech giant - Microsoft Corp. - reports quarterly earnings Thursday, although analysts seem less concerned about surprises there.

Small technology stocks have fared worst.

"We've had a pretty brutal correction," says Alex Henderson, technology analyst at Prudential Securities in New York. A fifth of the Nasdaq stocks, many of them small companies, lost 55 percent of their value in the past year.

But some analysts think the worst is generally over. Bruce Lupatkin, at Hambrecht & Quist in San Francisco, says he expects "a recovery in the technology sector by the end of the year."

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