Whither IT Spending In 2004?

IT spending is likely to improve in 2004 – but at a modest pace.

That was the assessment of CIO Magazine’s December poll, which found that CIOs plan to increase IT spending at a 6% rate over the next year. While that’s not likely to evoke comparisons to the late 1990s, the good news is that figure is up from a 4.2% prediction in November.

Ed Yardeni, chief investment strategist for Prudential Equity Group, noted that fewer CIOs are saying that weak profits are holding back IT spending, a first. He predicted that “strong profits will boost spending” this year.

George Elling of Deutsche Bank Securities said that the “IT spending outlook is promising heading into 2004. However, we are somewhat disappointed there were limited signs of a Q4 budget flush.”

At least IT spending is heading in the right direction.

The market was mixed Friday, as early gains on a better than expected national manufacturing report were restrained by concern about rising interest rates and terrorism fears.

The Nasdaq rose 3 to 2006, the S&P 500 lost 3 to 1108, and the Dow fell 44 to 10,409. Volume rose to 1.15 billion shares on the NYSE, but declined to 1.66 billion on the Nasdaq. Advancers led 17-15 on the NYSE, and 18-12 on the Nasdaq. Upside volume was 53% on the NYSE, and 70% on the Nasdaq. New highs-new lows were 467-16 on the NYSE, and 237-3 on the Nasdaq.

AT&T gained 3% on the company’s plans to increase prices.

Yahoo edged higher after Goldman Sachs raised estimates. Yahoo reports results Jan. 14.

Brocade rose 4% on positive analyst comments.

Micron climbed 2% on reports that it may settle price fixing charges.

Chinese Internet portals got off to a rousing start, led by Netease , Sohu and Sina , which gained 9-12% each.

IBM lost ground despite a big contract win.

Agere rose on news of an acquisition.

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