Dark Clouds Linger over Tech StocksBy Kathleen A. Martin | Print
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Tech vendors and solution providers fared well last week despite a plethora of bad news. Stocks fell, but not that much. Investors await this week's slate of earnings reports.
As the Northeast and Midwest were pounded with cold and snow last week, technology stocks sat under a storm cloud. Nearly 7,500 technology jobs were eliminated by Motorola, AMD, Google, Seagate, Autodesk, NEC and Oracle. Networking giant Nortel filed for bankruptcy protection, Intel announced a 90 percent drop in its 2008 net profit. And Apple CEO Steve Jobs announced that he will be taking a medical leave of absence.
Overall leading technology stocks tracked by Channel Insider dropped 3 percent.
A few rays of sunshine worked their way in this week. President-elect Obama and Democratic leaders announced their new stimulus package, which highlights the incoming president’s devotion to tech issues including naming the nation’s first ever chief technology officer.
Many vendors are taking advantage of the Obama inauguration with special offers to commemorate the transition of power and the first African-American to hold the Oval Office. For instance, Citrix Systems (NADAQ: CTXS) with a 60-day free trial of GoToMeeting or GoToMyPC to Washington, D.C. professionals. "The inauguration of a new president is always an historic occasion, but the reality is that heavy traffic and security precautions create significant challenges for local businesses," said Bernardo de Albergaria, vice president and general manager of global marketing and eCommerce for Citrix Online.
While several tech vendors have announced layoffs and corporate restructuring, IBM (NYSE: IBM) is creating 1,300 high-tech jobs to Dubuque, Iowa. IBM plans to have a couple hundred employees in the new technology delivery service center by the end of this year and as many as 1,300 employees by the end of 2010.
"We continue to invest in IBM's future and recruit the skilled persons we need to grow our business. The Dubuque Service Delivery Center is a model for creating new opportunities and we look forward to working with the city and the state of Iowa to accomplish great things together," said Mike Daniels, senior vice president of IBM Global Technology Services.
This will be a week to watch as several companies have their earnings announcements scheduled.
Technology Company Earnings Reports
IBM Q4 2008
Wipro Limited Q3 2008
Nokia Q4 2008
Xerox Q4 2008
The following are the week-over-week stock performance of leading, publicly traded technology vendors and solution providers.
Leading Technology Vendor Stocks
|Adobe Systems (ADBE)||24.01||21.06||-12.30%|
|Arrow Electronics (ARW)||19.01||19.29||1.50%|
|BMC Software (BMC)||26.45||27.39||3.60%|
|Check Point (CHKP)||21.13||20.96||-0.80%|
|Cisco Systems (CSCO)||16.7||15.82||-5.30%|
|Citrix Systems (CTSX)||22.56||23.23||3.00%|
|Data Domain (DDUP)||18.72||18.77||0.30%|
|Ingram Micro (IM)||13.22||13.5||2.10%|
|Juniper Networks (JNPR)||17.64||16.39||-7.10%|
|Nortel Networks (NT)||0.39||0.32||-17.90%|
|Red Hat (RHT)||15.46||14.82||-4.10%|
|Research in Motion (RIMM)||47.46||51.11||7.70%|
|Seagate Technology (STX)||5.64||4.39||-22.20%|
|Sun Microsystems (JAVA)||4.66||3.97||-14.80%|
|Tech Data (TECD)||19.15||19.41||1.40%|
Leading Solution Provider Stocks
|BT Global Services||20.76||18.22||-13.90%|
|Insight North America||7.14||6.74||-5.90%|
|NTT Data Corp||25.84||24.79||-4.20%|
|Tata Consultancy Services||535.65||502.95||-6.50%|