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Techs rebound
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December 21, 2001: 6:29 p.m. ET
Nortel outlook, chipmaker forecasts, analyst comments help lift Nasdaq.
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NEW YORK (CNN/Money) - Tech stocks made gains across the board Friday, as positive financial forecasts and optimistic news from analysts raised investors' hopes for the new year.
The tech-heavy Nasdaq composite index closed 27.29 points higher, 1.42 percent, to 1,945.83.
Nortel Networks (NT: up $0.77 to $7.13, Research, Estimates) helped the networking sector pick up speed after it said it expects to post a fourth-quarter loss of 16 cents per share, narrower than estimates of analysts polled by earnings tracker First Call who had expected a loss of 18 cents.
The American Stock Exchange Networking index jumped 8.26 points, 2.76 percent, to 307.43.
Chip shares rose as Banc of America said the sector should trend upwards over the next several months as shipments reach a bottom.
The semiconductor sector also got a boost after the monthly report from Semiconductor Equipment and Materials International said bookings to shipments, or book to bill, in the month rose to 0.73, meaning that $7.30 worth of new orders were received for every $10 of products shipped in the month.
Chipmaker Integrated Circuit Systems (ICST: up $2.56 to $21.51, Research, Estimates) raised its second-quarter revenue outlook, saying it sees a 5 to 10 percent increase from first-quarter revenue. The company's earlier estimate was a 5 percent increase.
The company's executives attributed the increase to strong demand for PC and game machine products.
Also, the company said Thursday it would buy privately-held Micro Networks, which supplies precision timing devices for optical networking, wireless and network servers, for $77 million in cash and debt.
Credit Suisse First Boston raised its estimate for Integrated Circuit to 15 cents per share from 14 cents for the second quarter, which ends this month, and increased its revenue estimate to $39 million from $38 million.
CSFB said the company is making all the right moves.
Specialty chipmaker Cirrus Logic (CRUS: up $1.11 to $12.46, Research, Estimates) said its third-quarter revenue could come in at the top end of guidance.
Company officials said their hope is that the digital entertainment industry will help revive demand for semiconductors.
The Philadelphia Semiconductor index rose 12.98 points, or 2.56 percent, to 520.58.
Microsoft (MSFT: up $0.78 to $67.54, Research, Estimates) asked a federal judge for a four-month delay of hearings scheduled to determine what antitrust remedy should be imposed on the company. In a motion filed before U.S. District Court Judge Colleen Kollar-Kotelly, Microsoft said the delay was needed because the states that have refused to settle with the company are seeking a "dramatic expansion" of the possible sanctions in the case.
Prudential raised its rating for business-to-business software company Manugistics (MANU: up $3.63 to $19.47, Research, Estimates) to "buy" from "hold" after the company reported a third-quarter loss of 11 cents per share, which was 5 cents better than expected.
The company said it expects its fourth-quarter loss to be narrower than Wall Street estimates.
Prudential analysts said the company has an attractive valuation, as it is improving business momentum and has enhanced visibility. Prudential forecasts a profit of 7 cents per share for 2003. The firm had been expecting a loss of 25 cents per share.
Goldman Sachs and CSFB also narrowed their loss estimates, while Robertson Stephens widened its estimate, citing lower growth coupled with "an increasingly competitive environment."
Business solutions software provider Cognos (COGN: up $3.02 to $23.30, Research, Estimates) reported third-quarter earnings of 15 cents per share, beating First Call analyst estimates by 3 cents.
Deutsche Banc Alex. Brown upgraded the company to "buy" from "market perform" on a healthy near-term outlook.
The firm said demand for business intelligence software has remained relatively healthy throughout the economic and tech spending slowdown.
Interactive television software maker Liberate Technologies (LBRT: up $0.72 to $10.47, Research, Estimates) reported a second-quarter loss of 6 cents per share, 3 cents better than expected.
Company officials said they expect a smaller loss than estimates in the third quarter and in 2002 and forecasted profits in the first half of 2003.
Robertson Stephens narrowed its 2002 estimate to a loss of 28 cents per share from a loss of 34 cents, but now forecasts a loss of 4 cents for 2003, down from an earlier forecast of breakeven.
Meanwhile, business-to-business software maker Ariba (ARBA: up $0.47 to $5.37, Research, Estimates) said it would enter an alliance with IBM (IBM: down $0.70 to $122.00, Research, Estimates) in which IBM will offer the company's purchasing software as a paid-for-service online product.
Goldman added shares of video-game software maker THQ (THQI: up $3.59 to $52.99, Research, Estimates) to the recommended list and forecasted fourth-quarter results at the upper end of guidance.
The firm said THQ is well-positioned to capitalize on the current video-game cycle due to its WWF and other powerful licensed brands, a strong balance sheet with no debt and a substantial revenue base.
The Goldman Sachs software index rose 2.81, or 1.57 percent, to 182.03.
Banc of America and CIBC raised targets for Research In Motion (RIMM: up $2.74 to $22.49, Research, Estimates), the maker of Blackberry handheld organizers, after the company reported third-quarter losses of 8 cents per share in line with estimates and warned earnings and revenue would be worse than expected for the fourth quarter.
The company also said it made a multi-year deal with Nextel to develop a Blackberry for Nextel's network.
Banc of America analysts said the company remains the leader in its sector with strong customer momentum, and they think February will be a challenging quarter and represent the bottom for the company.
Meanwhile, handheld competitor Palm (PALM: up $0.01 to $3.47, Research, Estimates) said it would appeal a court ruling in favor of Xerox after the copy machine company won a patent infringement suit against Palm and 3Com (COMS: up $0.47 to $6.24, Research, Estimates) over a patent for handwriting recognition software.
The Goldman Sachs hardware index moved 5.08 points, or 2.02 percent, higher to 256.04.
Fiber optic solutions provider Tellium (TELM: up $0.33 to $6.30, Research, Estimates) reconfirmed its fourth-quarter and 2002 guidance. It estimated revenue for 2001 in the range of $130 million to $135 million, in line with First Call's consensus analyst estimate of $134 million.
The Goldman Sachs Internet index gained 2.52 points, or 2.52 percent, to 102.55. 
from staff and wire reports
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