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Giddy chips lift tech sector
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June 9, 1999: 5:22 p.m. ET
Intel leads charge after upbeat sales projections; Qwest gets a BellSouth boost
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NEW YORK (CNNfn) - Shrugging off interest-rate concerns that hit stocks overall, the technology sector rallied following a report the chip sector is still strong.
One top analyst said he's skittish about tech this year, saying that the dreaded Y2K glitch could present uncertainty for investors in the sector.
"While I love technology longer term, I think technology is going to be very problematic in the rest of the year because nobody knows the ramifications of Y2K," said Joseph McAlinden, chief investment officer at Morgan Stanley Dean Witter.
Among the biggest winners were the top names in technology, such as Microsoft, Dell and Intel.
With its attorneys getting their crack at an IBM executive in the government's antitrust trial, Microsoft (MSFT) rose 2-15/16 to 82-15/16.
For its part, IBM (IBM) rose 3/8 to 117 as Big Blue announced it will buy privately held Whistle Communications, a provider of Internet capabilities for small businesses, for an undisclosed sum.
Top Microsoft rival Sun Microsystems (SUNW) rose 2-3/4 to 61-15/16 after inking a 10-year pact on wireless hardware with mobile phone company Motorola (MOT). Motorola rose 5/8 to 84-11/16.
Meanwhile, Dell Computer (DELL) rose 1-1/2 to 35-1/2 after a published report said the direct vendor of PCs will launch a free pan-European Internet service.
On the telecom front, long-distance provider Qwest Communications (QWST) climbed 3-11/16 to 47 after Baby Bell BellSouth (BLS) disclosed in a federal filing it is considering a buy of Qwest.
BellSouth, which already has a 10-percent stake in Qwest, slipped 1/16 to 46-1/16.
On the cable front, Cox Communications (COX) tacked on 1 to 38 after announcing it would take a $45 million stake in MP3.com, a Web site that streams music. MP3.com is on its way to an initial public offering.
Demand still strong for chips
Upbeat projections about the health of the semiconductor market lifted some chip stocks.
A report by the Semiconductor Industry Association projected that global computer chip sales will rise 12.1 percent this year led a buying spree for chip issues.
The Philadelphia Semiconductor index closed up 4.5 percent to close at 430.70.
Industry bellwether Intel (INTC) added 1-7/16 to 53-1/8 after saying it will move toward using 300-millimeter semiconductor wafers, in what Intel said could help it save costs.
That announcement prodded shares of PRI Automation (PRIA), a maker of chip-making equipment, up 5-9/16 to 33-5/8, more than 19 percent. Morgan Stanley Dean Witter raised its rating on PRI to "strong buy" from "outperform."
Among the other sector movers, the memory chip maker Micron Technology (MU) rallied 3-15/16 to 43-1/8, Cypress Semiconductor (CY) shot up 2-5/16 to 14-3/16 after a Prudential Securities upgrade, and Xilinx (XLNX) rose 3-9/16 to 49-1/16.
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