Wall Street Beat: Tech Stocks Hit Yearly High
Tech stocks hit a yearly high in U.S. markets Thursday as industry watchers pored over upbeat reports about server shipments and online spending, but ongoing worries about unemployment continue to dog businesses in all sectors of the economy.
Fri, December 03, 2010
IDG News Service — Tech stocks hit a yearly high in U.S. markets Thursday as industry watchers pored over upbeat reports about server shipments and online spending, but ongoing worries about unemployment continue to dog businesses in all sectors of the economy.
The tech-heavy Nasdaq closed Thursday at 2579.35, exceeding by less than a point its prior high for the year, set Nov. 5. Computer stocks closed on the Nasdaq up 14.5 percent for the year. At this point, the Nasdaq Composite Index -- as well as broader indexes such as the Dow and S&P -- is back at the level it was before the stock market plunge of October 2008, after Lehman Brothers collapsed.
Worries about European sovereign debt, unimpressive jobs and housing data, as well as a Cisco warning several weeks ago about a dip in global government spending, caused tech stocks to stumble in mid-November along with share prices of businesses in a wide variety of sectors. But European Central Bank purchases this week of Portuguese and Irish debt, stronger-than-expected U.S. retail sales data, and a fusillade of upbeat tech-sector reports helped push stocks back up to yearly highs.
Cyber Monday -- the first Monday after the U.S. Thanksgiving holiday -- marked a major step for e-commerce: for the first time online spending surpassed US$1 billion for a single day, hitting $1.028 billion online on that day alone, according to ComScore. That amount was a 16 percent jump over Cyber Monday spending last year, suggesting that forecasts for strong online sales for the end-of-year holiday shopping period may turn out to be correct.
In hardware, both IDC and Gartner reported strong server data for the third quarter. Gartner said that global server shipments totaled 2.2 million, jumping 14.2 percent from the same period last year. Server sales hit $12.29 billion, up 15.3 percent year over year, Gartner said.
IDC noted that it was the third consecutive quarter of year-over-year revenue growth for servers and the fastest quarterly revenue growth in that market since 2000.
"The server market experienced its strongest growth in 10 years in the third quarter of 2010," said Matt Eastwood, group vice president at IDC, in a statement. "All geographic regions exhibited positive growth for the second consecutive quarter as the infrastructure build-out and refresh extends across SMB, enterprise, public sector, and cloud/hoster organizations."
On the PC front, there are some clouds in the Gartner forecast for the year, as the market researcher cut shipment estimates due to concerns that economic uncertainty would dampen demand. Worldwide PC shipments are on pace to total 352.4 million units in 2010, a 14.3 percent increase from 2009 but down from earlier estimates of 19.9 percent growth.