Intel, IBM Remain Cautious

If there is a theme for technology spending in 2003, perhaps “bouncing along the bottom” describes it best. It’s not getting any worse, but it doesn’t appear to be getting much better either.

One technology executive after another has come forward in recent weeks to say that the outlook for tech spending in 2003 remains lackluster.

“We continue to be optimistic about the future,” Intel CEO Craig Barrett said at his company’s analyst meeting on Thursday. “We continue to be cautious about tomorrow.”

IBM chief Sam Palmisano was somewhat more upbeat, declaring that the market had “stabilized.”

Of course, the problem with stabilization for investors is that they’ve been pricing in a more robust recovery. Dell met analysts’ expectations after the close on Thursday, and reaffirmed them for the July quarter, but investors had hoped for more. DELL stock slipped after hours, despite being one of the few tech leaders showing genuine growth. Dell is expected to grow earnings by an average of 20% over the next two years, but at 40 times earnings, that growth may be priced in.

The news for the broader market on Thursday could best be described as dismal: the largest-ever drop in producer prices, continuing high jobless claims, and declining manufacturing activity. But investors continued to buy the bad news, sending stocks higher on the day.

The Nasdaq rose 16 to 1551, the S&P 500 climbed 7 to 946, and the Dow gained 65 to 8713. Volume rose to 1.45 billion shares on the NYSE, and 1.97 billion on the Nasdaq. Advancers led 20-12 on the NYSE, and 18-13 on the Nasdaq. Upside volume was 69% on the NYSE, and 66% on the Nasdaq. New highs-new lows were 254-4 on the NYSE, and 200-10 on the Nasdaq.

Computer Associates and Intuit surged on better than expected results and guidance.

Brocade fell 14% on in-line results, weighing on the storage sector. Fibre Channel sales have slowed, according to a new report.

Analog Devices rose 3.7% after beating estimates, while BEA slipped after matching estimates.

Qualcomm continued to come under pressure on CDMA competition from Texas Instruments , Nokia and others.

EDS , up 0.3%, plans a TV advertising campaign.

Symantec , up 0.8%, could benefit from trends in security software spending, analysts say.

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