Tech stocks edged higher on Friday
Tech stocks edged higher Friday, buoyed by the upcoming addition of an Internet search giant to the benchmark Standard & Poor's 500 Index.
Google shares surged late Thursday and Friday on news the stock would join the S&P 500 on March 31. "As a result, we think the stock will be in demand from funds and ETFs that emulate the S&P 500, and to some extent, those whose benchmark is the S&P 500," wrote Standard & Poor's equity research analyst Scott Kessler in a research note Friday. " We consider this a major near-term positive for the stock, but it does not change our skepticism about what we consider the notable material challenges faced by Google." Kessler maintained a "hold" rating on Google, which will replace Burlington Resources in the index. Burlington is being acquired by ConocoPhillips. Google shares were up as much as 8% Friday.
Adobe Systems disappointed investors with a drop in profit and weaker than expected guidance in its first earnings report since its acquisition of Macromedia. Late Wednesday, the graphic-design software maker reported fiscal first-quarter 2006 earnings of 32 cents per share, beating the Street's expectation of 29 cents. Revenue rose 39% to $655.5 million, versus the consensus estimate of $650.3 million. But the company guided its fiscal second-quarter outlook to earnings of 31 cents per share on revenue of $655, below prior Street consensus of 32 cents per share on revenue of $675 million, leading RBC Capital to downgrade Adobe to "sector perform" from "outperform." "We believe investors will have an opportunity to find more attractive entry points prior to the next product cycle in early 2007," wrote analyst Robert Breza in a report Thursday. Adobe shares fell on the earnings news but recovered slightly on Friday afternoon.
Microsoft conceded that some versions of its Office suite will be delayed until early next year after deciding earlier this week to push back the shipment of its Windows Vista operating system to January 2007 from its previously slated November launch date. The stock gave up 2% on Wednesday on news of the Vista delay, which will likely affect Microsoft's fourth-quarter numbers, analysts said. However, neither the Vista nor the Office delay is expected to have any impact on Microsoft's long-term financials. In a Wednesday report, Lehman Brothers said the delayed launch of Vista could actually have a positive impact in the first quarter of 2007 and beyond. The research firm reiterated an "overweight" rating on Microsoft.
Apple Computer stood up to the French, but its stock lacked strength as it dropped more than 3% Tuesday after the French National Assembly voted to approve a bill that would allow iTunes to play on competitors' MP3 players. Apple Chief Executive Officer Steve Jobs responded in a statement that such a law would result in "state-sponsored piracy." Piper Jaffray analyst Gene Munster said Apple would rather remove itself from the French market (2% of iTunes and iPod sales) than start "what could be a slippery slope of other countries passing similar legislation." The analyst maintained an "outperform" rating on the stock. " While this sounds like a drastic move, we believe it would not materially impact business," Munster wrote in a report Tuesday. The analyst noted in a separate report that Microsoft's Vista delay could benefit Apple by diminishing fourth-quarter competition. But no amount of encouragement could hearten Apple shares, which declined steadily over the week.
Tech stocks edged higher Friday, buoyed by the upcoming addition of an Internet search giant to the benchmark Standard & Poor's 500 Index.
Google shares surged late Thursday and Friday on news the stock would join the S&P 500 on March 31. "As a result, we think the stock will be in demand from funds and ETFs that emulate the S&P 500, and to some extent, those whose benchmark is the S&P 500," wrote Standard & Poor's equity research analyst Scott Kessler in a research note Friday. " We consider this a major near-term positive for the stock, but it does not change our skepticism about what we consider the notable material challenges faced by Google." Kessler maintained a "hold" rating on Google, which will replace Burlington Resources in the index. Burlington is being acquired by ConocoPhillips. Google shares were up as much as 8% Friday.
Adobe Systems disappointed investors with a drop in profit and weaker than expected guidance in its first earnings report since its acquisition of Macromedia. Late Wednesday, the graphic-design software maker reported fiscal first-quarter 2006 earnings of 32 cents per share, beating the Street's expectation of 29 cents. Revenue rose 39% to $655.5 million, versus the consensus estimate of $650.3 million. But the company guided its fiscal second-quarter outlook to earnings of 31 cents per share on revenue of $655, below prior Street consensus of 32 cents per share on revenue of $675 million, leading RBC Capital to downgrade Adobe to "sector perform" from "outperform." "We believe investors will have an opportunity to find more attractive entry points prior to the next product cycle in early 2007," wrote analyst Robert Breza in a report Thursday. Adobe shares fell on the earnings news but recovered slightly on Friday afternoon.
Microsoft conceded that some versions of its Office suite will be delayed until early next year after deciding earlier this week to push back the shipment of its Windows Vista operating system to January 2007 from its previously slated November launch date. The stock gave up 2% on Wednesday on news of the Vista delay, which will likely affect Microsoft's fourth-quarter numbers, analysts said. However, neither the Vista nor the Office delay is expected to have any impact on Microsoft's long-term financials. In a Wednesday report, Lehman Brothers said the delayed launch of Vista could actually have a positive impact in the first quarter of 2007 and beyond. The research firm reiterated an "overweight" rating on Microsoft.
Apple Computer stood up to the French, but its stock lacked strength as it dropped more than 3% Tuesday after the French National Assembly voted to approve a bill that would allow iTunes to play on competitors' MP3 players. Apple Chief Executive Officer Steve Jobs responded in a statement that such a law would result in "state-sponsored piracy." Piper Jaffray analyst Gene Munster said Apple would rather remove itself from the French market (2% of iTunes and iPod sales) than start "what could be a slippery slope of other countries passing similar legislation." The analyst maintained an "outperform" rating on the stock. " While this sounds like a drastic move, we believe it would not materially impact business," Munster wrote in a report Tuesday. The analyst noted in a separate report that Microsoft's Vista delay could benefit Apple by diminishing fourth-quarter competition. But no amount of encouragement could hearten Apple shares, which declined steadily over the week.
Share this page
Email this page
Back to Top
Home
Edit Post
0 comments: