By Benjamin Pimentel
Most technology stocks slid early Friday, weighed down by losses
in shares of IBM Corp. and Advanced Micro Devices, although one
analyst says the first wave of earnings point to a strengthening
sector.
AMD (AMD) tumbled more than 5% in the opening minutes of the
session. The Sunnyvale, Calif.-based chip maker posted a narrower
quarterly loss on Thursday, but lingering concerns about the
company's ability to compete remain.
"With the loss situation projected to continue through 2010
despite improved sales and margin estimates, we recommend investors
remain on the sidelines with AMD pending evidence of significant
improvement in operational performance," Thomas Weisel Partners
analyst Kevin Cassidy said in a note.
Meanwhile, IBM (IBM) shares also sank more than 4%, after Big
Blue on Thursday reported a 14% jump in third-quarter earnings, but
also posted sales declines in some of its biggest businesses.
Overall, the fist wave of tech earnings reports, particularly
from IBM and Intel Corp. (INTC), has reinforced the view of a
rebounding sector, propelled by strong consumer demand and a
corporate market poised for an up tick.
"From the read so far from Intel, IBM, the Asia-Pacific supply
chain vendors and distributors, overall technology spending
continues to hold up relatively better in this difficult
macroeconomic environment," Kaufman Bros. analyst Shaw Wu said in a
note. "Consumer is better than expected while enterprise is seeing
stabilization and in some cases a rebound."
A bright spot for tech on Friday came from Google Inc. (GOOG),
shares of which rose more than 3% after the Internet behemoth
topped Wall Street's projections.
But IBM and AMD set the pace for the sector retreat, as the
Nasdaq Composite Index (RIXF) fell 1.2% to 2,146.
The Morgan Stanley High Tech 35 Index (MSH) was down 1.8%, while
the Philadelphia Semiconductor Index (SOX) was off 2.6%.
Gains from Yahoo Inc. (YHOO) and Oracle Corp. (ORCL).
But other major tech players were in the red, including
Microsoft Corp. (MSFT), Dell Inc. (DELL) and Apple Inc. (AAPL)