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Tech stocks move higher as broader market makes gains
By Benjamin Pimentel, MarketWatch
Last Update: 10:32 AM ET Nov 23, 2009
SAN FRANCISCO (MarketWatch) -- Technology stocks advanced across the board Monday morning, riding a wave of broader market optimism as gold and other commodities rose sharply and the dollar retreated against most rival currencies.
The Nasdaq Composite Index COMP rallied 1.9% in the opening minutes of the session to 2,188, as shares of most major tech players posted gains.
The chip sector again led the tech rally, as the Philadelphia Semiconductor Index $SOX outpaced the Nasdaq, gaining 2.2%.
Part of the reason is the rising expectation of a pickup in the corporate tech market as businesses begin replacing or upgrading aging systems.
Wells Fargo analyst David Wong cited this trend in a Monday note, saying: "Last week's news included further indications of the beginnings of a corporate computer demand pickup and component shortages."
Wong referred to Dell Inc.'s quarterly results. Although its sales and earnings per share "were below expectations," the computer maker DELL "achieved 4% sequential growth in large enterprise revenues and 5% for small and medium business sales and the company mentioned component shortages and higher component prices."
Shares of major chip makers on the rise to start the holiday-shortened week included Advanced Micro Devices AMD, Intel Corp. INTC, Texas Instruments TXN and Nvidia Corp. NVDA.
Dell's shares traded up 2.7%.
Meanwhile, rival Hewlett-Packard Co. HPQ saw its shares gain 1.7%, as the Palo Alto, Calif.-based tech behemoth gears up to release fourth-quarter financial results that analysts expect will point to more stability. See story on H-P's earnings outlook.
"Our read from industry sources indicates modest upside in services and a bigger upside in its hardware businesses including PCs, servers and printers," Kaufman Bros. analyst Shaw Wu said in a note.
H-P's results also could shed more light on the state of the PC market -- and of Dell, which reported results that disappointed investors.
"We believe Dell's miss and most others doing well reinforces our view that Dell's issues are company-specific and not indicative of end-market trends," Wu told clients.
Dell's continuing to lose market share to H-P as well as Apple Inc. AAPL, Acer and others, he said, "whether in good or bad markets."
Shares of Apple moved up 2.5%, while other major tech giants also posted gains, including IBM Corp. IBM, Oracle Corp. ORCL and Cisco Systems CSCO.
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