Technology stocks bounced back Monday as downtrodden investors gingerly sorted through devalued shares hurt by last week's heavy selling.
In early afternoon trading, the Nasdaq Composite Index climbed 72 to 1495.20, after plunging 16% last week. Morgan Stanley's high-tech index rose 20.30 to 381.80, and the Dow Jones Internet Index gained 2.50 to 41.40 points.
Shares of technology stocks hemorrhaged last week amid debilitated investor sentiment in the wake of the Sept. 11 terrorist attacks on New York's World Trade Center and the Pentagon in Arlington, Va. U.S. markets were closed for four sessions following the attacks and reopened Sept. 17, a week which saw the Nasdaq plummet 16% and the Dow Jones Industrial Average fall more than 14%.
Wall Street sentiments remain mixed despite gains Monday, but some analysts expressed optimism.
"I think this is real today. This is a pretty broad base," said Art Hogan,
chief market analyst with Jefferies and Co.
But analysts pointed out that while while the market could begin to stabilize this week, there are a lot of variables -- including economic indicators -- that could throw it off course again.
Consumer confidence numbers, due out Tuesday, could help analysts get a better grasp of the current market sentiment. The report could give us "the first comprehensive glimpse at sentiment" in the wake of the terrorist attacks, said Bear Stearns analyst Wayne Angell in a research note. Mr. Angell is expecting a sharp drop in consumer confidence for September owing to last week's plunging stock market and massive layoff announcements.
Investors took a deep breath Monday morning before moving to make purchases. Several tech bellwethers saw gains as investors hunted for bargains in what some are calling an oversold market.
Sun Microsystems rose $1.03 to $8.99, Cisco Systems climbed 91 cents to $13, and software maker BEA Systems gained 95 cents to $11.29, all on the Nasdaq Stock Market.
Microsoft gained $1.72 to $51.43 on Nasdaq. The software giant postponed the sale of its Xbox console by a week, declining to give reasons for the setback. The company also faces concerns for sales of its upcoming Windows XP operating system as consumer confidence slips.
JDS Uniphase rose 81 cents to $6.17 on Nasdaq after the company said it sees first-quarter sales of $325 million.
Compaq Computer rose 51 cents to $8.50 after Salomon Smith Barney upgraded the stock to "buy" from "neutral." Hewlett-Packard, which announced its intent to buy former rival Compaq earlier this month in a deal so far met with skepticism from investors, gained 78 cents to $15.74. Both companies trade on the New York Stock Exchange.
RealNetworks jumped 72 cents, or 22%, to $4.06 on Nasdaq after the company launched a new version of its popular audio and video software that integrates a Web browser, a step analysts say increases the company's competition with Microsoft. Adding to investor buying Monday, was that shares of RealNetworks on Friday traded at the level of the company's cash on hand, said Phillip Leigh, an analyst with Raymond James & Associates.
Charter Communications dropped $2.33, or 14%, to $13.67 on Nasdaq after the cable-television company said its president and chief executive, Jerry Kent, will resign.
SBC Communications gained 61 cents to $44.86 on the Big Board after the company offered to purchase the remaining 58% of Prodigy Communications that it doesn't already own. Prodigy climbed $1.95, or 55%, to $5.49 on Nasdaq.
Intuit fell $1.64 to $33.60 on Nasdaq. The company, which makes business-software products, said it agreed to buy OMware for up to about $42 million in stock and said it expects to meet its previous earnings guidance. Additionally, the company is unveiling new products for small businesses.
VeriSign lost 26 cents to $38.56 on Nasdaq after the company, which controls Internet addresses, said it will purchase Illuminet for $1.2 billion in stock.
Analysts seem generally positive on the deal, which will give VeriSign an "opportunity to sell additional services," said an SG Cowen report. Illuminet operates a system combining
