Techs ride Microsoft wave
|
|
October 20, 1999: 4:46 p.m. ET
Strong earnings and bullish outlook from software leader buoys entire sector
|
NEW YORK (CNNfn) - Technology investors had Microsoft Corp. on their minds Wednesday, as a strong earnings report and a bullish outlook from the software firm boosted stocks throughout the sector.
After three consecutive losing sessions, the Nasdaq composite index soared 99.94 to close at 2788.12, according to preliminary data.
The day's news centered around Microsoft (MSFT), which posted a fiscal first-quarter profit 4 cents ahead of Wall Street forecasts. Also, in a statement uncharacteristic of the usually cautious software giant, Microsoft's chief financial officer guided financial analysts to raise their second-quarter earnings estimates.
Microsoft shares rose 5-15/16 to close at 92-1/4.
S.G. Cowen upgraded its rating on Microsoft's stock to a "strong buy" from "buy," and raised its fiscal 2000 earnings estimates to $1.65 a share from $1.55.
Morgan Stanley Dean Witter increased its fiscal 2000 forecast to $1.63 a share from $1.56.
Analysts and investors were especially pleased to hear that Microsoft's growth was driven primarily by strong demand for PCs, especially in light of recent troubling earnings forecasts from Dell Computer Corp. and Hewlett-Packard Co., as well as Intel Corp.'s recent earnings disappointment.
"This Microsoft news is going to be terrific for all those PC companies that have been taking it on the chin lately -- Intel being one, but Dell and Compaq and others, I think, will certainly benefit today," said Chris Grisanti, research director at Spears, Benzak, Salomon & Farrell.
Among shares riding the Microsoft wave Wednesday were Intel (INTC), which added 4-13/16 to 69-15/16; Dell (DELL), which closed 1-1/2 higher at 40; and Hewlett-Packard (HWP), which climbed 2-13/16 to 76-9/16.
Investors had their eyes on other earnings news, as well. IBM (IBM) rose 5-5/8 to 112-3/4 in anticipation of its third-quarter results. After the market closed, Big Blue reported earnings of $1.8 billion, or 93 cents a share, matching analysts' expectations.
In the Internet sector, America Online Inc. (AOL) climbed 5-3/4 to 121. The No. 1 online service provider is expected to earn 13 cents a share when it reports earnings results after markets close.
|
|
|
|
|
|