|
Oracle paces tech gains
|
 |
June 16, 1999: 4:29 p.m. ET
Strong earnings showing from Oracle, mild CPI results spur tech surge
|
NEW YORK (CNNfn) - Positive earnings from Oracle and good news on the inflation front was enough to shake technology stocks of out their doldrums and shoot them solidly higher at market's close Wednesday.
Database software firm Oracle (ORCL) provided a positive vision for tech stocks Wednesday. After markets closed Tuesday it announced fiscal fourth quarter earnings of $527 million, solidly surpassing Wall Street estimates.
Investors bid up the price on Wednesday, pushing the company's stock up 7-13/16 to 32-15/16.
The company also benefited from a slew of analyst upgrades. Hambrecht & Quist analyst James Pickrel raised his rating on Oracle to "buy" from "market perform." Pickrel also raised his fiscal 2000 earnings-per-share estimate to $1.06 from 98 cents.
Credit Suisse First Boston's Wendell Laidley raised his Oracle rating to "strong buy" from "buy," while Warburg Dillon Read analyst Andrew Roskill upped his rating to "buy" from "hold."
"There were literally no blemishes we could uncover in the quarter," Roskill said.
Investors looking to invest in techs took the news to heart, wasting no time Wednesday moving back toward a sector that earlier had enjoyed only lukewarm interest. The Nasdaq composite index leapt 102.99, or 4.27 percent, to 2517.66.
Oracle's earnings were a big surprise to the market, according to Ciaran O'Kelly, stock market strategist at Salomon Smith Barney.
Additionally, the tech stocks, and Internet issues in particular, have seen a stiff sell-off and investors are seizing the day to find some bargains, she explained.
The good news from Oracle spread to other companies that make business-oriented software. Those participating in the rally included I2 Technologies (ITWO), which was added to Goldman Sachs' "recommended" list. The company announced it is transforming itself into an Internet infrastructure company. Its stock jumped 7-1/2 to 40-9/16.
Analysts say these business software companies are also benefiting from decreased worries that the Year 2000 computer glitch will reduce demand for such software offerings.
Companies getting a rebound from reduced Y2K concerns included testing and development software company Compuware (CPWR), up 3-1/4 to 29-1/2.
Hardware stocks registered solid gains on Wednesday as well, although they couldn't quite match software's success.
Among the widely held issues, semiconductor giant Intel (INTC) rose 4 to 59-11/16 while competitor Micron Technology (MU) gained 3-1/4 to 46-1/2. Among computer manufacturers, IBM (IBM) was up 5-1/16 to 120-15/16, Compaq (CPQ) edged up 15/16 to 22-1/8 and Dell Computer (DELL) was up 1-13/16 to 35-13/16.
The Internet sector saw increased interest as well, with some of its most notable names registering double digit gains.
America Online (AOL) rose 11-15/16 to 106, while Yahoo! (YHOO) leapt 16-3/8 to 141-5/8. Online trading firm E*Trade (EGRP) may not have made similar gains but managed a strong day after days of investor concern over such services. Its stock was up 3-5/8 to 35-5/8.
CPI is A-OK
Earlier in the day, the U.S. Commerce Department said the May consumer price index, a key inflation indicator, remained unchanged. The core rate, excluding food and energy, rose just 0.1 percent.
Wall Street had been braced for a 0.2 percent increase in the CPI and technology investors in particular had been nervous, since tech stocks are particularly sensitive to changes in interest rates.
Ash Rajan, market analyst at Prudential Securities, said the numbers should allow tech investors to be a little more focused.
"It gives us leadership temporarily," said Rajan, who decried a lack of tech stock leadership over the past few weeks.
"It was like coming in in the morning and saying, 'Let's get somewhere or shoot from the hip.' We are not shooting from the hip anymore. There is some discipline, and we need to see how much of this rally is endurable or how long it will last."
|
|
|
|
|
|
Oracle
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
