Tech stocks were reaching for higher ground in mid-afternoon trading Thursday as traders grappled with the likelihood of slower sales this year.
While it's no great surprise that growth for many info-tech powerhouses is subsiding, investors are nevertheless displeased that the sky's no longer the limit for companies like Dell Computer and Hewlett-Packard, which both reported lower-than-desired revenue numbers for the latest quarter. The simple fact is, there are a lot of portfolios out there that are top-heavy with tech shares, and their owners are scrambling to decide whether to sit tight or cash in.
The broader market was showing strength. If traders were unsure what to do with their tech holdings, they felt a good deal more comfortable about hunting down bargain-priced blue chips following Wednesday's sell-off.
The Dow Jones Industrial Average gained 101.56 points to 9297.03, and the Nasdaq Composite Index was up 12.97 at 2261.88. The S&P 500 rose 13.87 to 1237.90.
"It's a strange bird we have here," Bill Meehan, chief market analyst with Cantor Fitzgerald, said of the roller-coaster market. "There's a lot of money out there that's dazed and confused."
Investors are slowly coming to terms with how current valuations stack up against expected near-term performance, he observed, and also are weighing the prospect of Greenspan & Co. raising interest rates in weeks ahead.
One encouraging sign: It looks like Dell (DELL) hit bottom after dropping US$7.19 a day earlier. Say what you will about the company's lower revenue, Dell remains a market favorite, and the bargain hunters were quick to chase down its shares as the day progressed. Dell was up $1.38 at $82.94.
International Business Machines (IBM) was higher as well as it announced plans to bundle the Linux operating system with a number of its servers, workstations, and personal computers. IBM gained $2.63 to $173.13, while Microsoft (MSFT), which can't be happy with any challenge to the dominance of Windows, shed $3.81 to $146.19.
PeopleSoft (PSFT) was breathing easier after the Securities and Exchange Commission decided the business application maker won't have to restate past earnings because of questionable accounting practices. PeopleSoft had boosted its bottom line by taking charges for research in the works by acquired firms. The SEC is now in the process of tightening the policy screws to curtail such doings. PeopleSoft rose 38 cents to $17.69.
While most Internet stocks were lower, Broadcast.com (BCST) resisted the downtrend with a 17-percent surge to $67.81. The company inked a deal with Capitol Records to create a new online music channel featuring both audio and video attractions. Separately, Donaldson, Lufkin & Jenrette raised its rating for Broadcast.com's stock to "buy" from "market perform."
Affinity Technology Group (AFFI) also had wings on its heels, flying 12 percent to $2.03 after unveiling new e-commerce technology that allows lenders to deliver speedy loan decisions to customers via the Net. It didn't hurt that Affinity named the subsidiary handling this new service decisioning.com.
Is "decisioning" even a word?
AT&T (T) advanced $1.63 to $85.94 after receiving a green light from federal regulators for its $57.5 billion acquisition of cable giant Tele-Communications Inc. Meanwhile, Comcast (CMCSA), the No. 4 US cable company, was $2.31 higher at $65.25 after agreeing to buy Greater Philadelphia Cablevision for approximately $264 million in stock.
For a really big-bucks deal, check out Transamerica (TA) being gobbled up by Europe's seventh-biggest insurer, Aegon, for nearly $11 billion. Transamerica soared 26 percent to $72.88 on the news.
