Ebullience returns to techs
February 22, 1999: 5:08 p.m. ET
Investors pour back in after recent slump, bellwethers lead the way
NEW YORK (CNNfn) - It was delight nearly across the board for investors in high-technology stocks Monday, as the softness in the sector began to wear off, analysts said.
The Nasdaq Composite added 58.41 points, or 2.6 percent, to 2,342.01, as the index more than erased its 1.7 percent dip last week.
"It's just telling you that the selling has been done, and now investors are coming in looking for bargains," said Peter Canelo, investment strategist at Morgan Stanley Dean Witter. "The bulls are back in the saddle."
Bellwethers lead the charge
Despite an absence of earth-shaking announcements, it was the big names in the tech sector and several computer-chip makers that powered the rally on Monday.
Among the winners were Dow issue IBM (IBM), rising 6-5/16 to 177-15/16 after Big Blue unveiled an advance in semiconductor technology that will allow entire electronic systems to be built on a single chip.
Meanwhile, the low-cost chip maker Advanced Micro Devices (AMD) rallied 1-11/16 to 19-5/16 as it rolled out its anticipated K6-3 microprocessor.
Chip giant Intel (INTC), which is set to unleash its Pentium III chip Friday, climbed 4-3/4 to 132-13/16.
Elsewhere, Micron Technology (MU) rose 4 to 68-1/18; Texas Instruments (TXN) added 5-7/8 to 98-7/8.
PC companies ride higher
Several premier makers and vendors of personal computers got a lift. Hambrecht & Quist analyst Walter Winnitzki began coverage of five top sector players, saying the sentiment for the firms has become more favorable.
The direct PC vendor Gateway (GTW), which received a "buy" rating from Winnitzki, rose 6-7/16 to 79-5/16. Piper Jaffray analyst Ashok Kumar upgraded the stock to "strong buy" and upped his target price to $95-$100 per share.
Compaq Computer (CPQ) mustered an increase of 1-9/16 to 42-11/16, Dell (DELL) rose 4-3/4 to 84-7/8, and Apple Computer (AAPL) gained 1-1/4 to 38-7/16.
Dow member Hewlett-Packard (HWP) roared up 5-9/16 to 73-7/8 after announcing a line of Brio PCs with U.S. prices starting at $699.
Elsewhere, the electronic-component vendor Marshall (MI) sank 3-13/16 to 15-1/2 after announcing it would come up far short of analysts earnings targets for its fiscal third quarter due to lower-than-expected demand.
Among top software players, one stand-out was Sun Microsystems (SUNW), up 7-7/8 to 104-5/16. The company and two partners unveiled a new healthcare billing and management software using Sun's Java technology.
Meanwhile, Microsoft (MSFT), still in a head-to-head battle with the U.S. government in its antitrust trial, rose 1-1/16 to 148-13/16.
A smattering of deals
It was a busy day on the merger front, and technology-sector players contributed their fair share.
Specialty semiconductor maker LSI Logic (LSI) said on Monday that it agreed to buy SEEQ Technology (SEEQ), a developer of data communications chips, in a deal valued at $100 million in stock. LSI rose 15/16 to 28-3/16, SEEQ rose 17/32 to 2-9/16.
Elsewhere, Beyond.com (BYND) climbed 1-13/16 to 26-9/16 after the online software vendor said it would buy privately-held rival Buydirect.com for about $134 million in stock.
The top-drawer investment bank Goldman Sachs declined to comment on early reports it was nearing some type of alliance with Internet broker E*Trade Group (EGRP).
E*Trade shares rose 8-7/16 to 48-9/16, or more than 21 percent. while rival Ameritrade (AMTD) was up 18-1/4 to 104-1/4.