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Software industry

Stocks Rise Strongly on Technology Sector's Recovery

Strategic Insights

— 1 min read

The Nasdaq composite index, driven by gains in Microsoft and I.B.M., recorded its largest increase in a week yesterday. Technology stocks staged a late rally after initially plummeting on I.B.M.'s weaker-than-expected third-quarter earnings. However, I.B.M.'s new chief financial officer's subsequent address to analysts helped the company's shares recover, while Microsoft's strong first-quarter earnings report exceeded expectations.

Key Takeaways:

  • Technology stocks led the market's strong gain, with Microsoft shares surging 4 3/8 to 91 1/8.
  • I.B.M.'s new chief financial officer, G. Richard Thoman, reassured analysts, causing the company's shares to rebound from a loss to close 2 7/8 higher at 96 7/8.
  • Microsoft reported first-quarter earnings of 78 cents a share, exceeding estimates of 70 cents and last year's 51 cents.
  • The Dow Jones industrial average rose 11.56 points to 4,795.94, and the Standard & Poor's 500-stock index rose 3.75 points to 586.78, setting a new record.
  • Computer and semiconductor stocks contributed significantly, with Intel shares rising 2 3/8 to 65 1/2.
  • 56.7% of the 141 S.& P. 500 companies that have reported earnings so far beat forecasts, while 31.9% lagged.
  • Companies reporting strong profits included Eastman Kodak, Sprint, GTE, Sun Microsystems Inc., Cypress Semiconductor Corp., Novellus Systems Inc., and Integrated Silicon Solution Inc.

Statistics:

  • The Nasdaq composite index rose 17.31 points to 1,035.44, its largest gain since last Wednesday.
  • Microsoft shares surged 4 3/8 to 91 1/8.
  • I.B.M.'s new share price closed at 96 7/8.
  • Intel shares rose 2 3/8 to 65 1/2.
  • Eastman Kodak's net income surged to 99 cents a share.
  • Sprint rose 3/4 to 36.
  • GTE advanced 1 1/8 to 40 1/4.
  • 56.7% of S.& P. 500 companies beat forecasts in quarterly earnings.
  • 31.9% of S.& P. 500 companies lagged in quarterly earnings.
  • Sun Microsystems Inc.'s first-quarter earnings exceeded estimates at 85 cents a share.
  • Cypress Semiconductor Corp.'s third-quarter net income rose to 70 cents a share.
  • Novellus Systems Inc.'s third-quarter earnings exceeded estimates at $1.27 a share.

Sources:

  • The New York Times, 1993
  • The Wall Street Journal, 1993
  • Reuters, 1993

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