HP Surges On Strong Printer Sales

HP surged 5% Wednesday on results that beat Wall Street expectations.

Much of HP’s success was due to a 13% increase in its core Imaging and Printing group – a business recently targeted by Dell.

HP, with 55% of revenues from overseas, also likely benefited from a 22% decline in the U.S. dollar from the year-ago quarter.

The company said IT spending remains soft and announced plans for more layoffs, but analysts were generally positive on the results. Lehman Brothers called the company its favorite hardware play.

Investors showed some reservations about HPQ stock. It opened at the high of the day, but drifted lower the rest of the day to close near the lows, 2.7% off the high. (For a chart of HPQ, see the daily Technical Analysis column at http://www.InternetStockReport.com.)

The broader market posted modest gains on mixed testimony from Fed Chairman Alan Greenspan, who said the timing and strength of an economic recovery remains uncertain.

The Nasdaq slipped 1 to 1489, the S&P 500 gained 3 to 922, and the Dow rose 25 to 8516. Volume declined to 1.44 billion shares on the NYSE, and 1.59 billion on the Nasdaq. Advancers led 19-13 on the NYSE, and 16-14 on the Nasdaq. Upside volume was 65% on the NYSE, and 46% on the Nasdaq. New highs-new lows were 250-7 on the NYSE, and 84-9 on the Nasdaq.

After the close, Synopsis beat estimates.

During the day, Lucent gained 4.7% on a $50 million contract win.

VeriSign surged 5% on a deal with Merrill Lynch.

Microsoft fell 2.4% on rumors of price cuts.

Cisco lost 1.8% on a valuation downgrade.

SanDisk surged 10% to a new 52-week high on an upgrade.

UTStarcom gained 5.6% on a contract with China Telecom.

Intel rose 1% after unveiling new chips.

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