Wall Street investors chose to gamble yesterday that the worst is over for the big US tech companies and sent shares upwards for a second consecutive day on the strength of some less-than-disastrous earnings reports and a dip in unemployment claims. At midday the Dow had soared to over 11,300, though it fell in late selling. The Nasdaq closed at 2,193.59, up 27.15.
Ciena reported a second-quarter net loss of $50.68 million (#57.4 million), but earnings before items more than tripled to beat Wall Street forecasts, and the Maryland-based communications equipment maker said it can continue to weather the economic slowdown thanks to strong demand. The California-based computer and printer-maker, Hewlett-Packard, reported a 66 per cent earnings fall-off that beat lowered expectations, although sales were less than forecast and net income was less than half initial projections. Shares in Ciena and HewlettPackard, which employs 2,400 people in Leixlip, rose on the news.
Oracle, the world's number two software group, said it was sticking to its targets for flat fourth-quarter earnings, but forecast demand would begin to bounce back by the end of 2001. Adding to the upbeat mood, Intel, the world's largest chipmaker, said it could generate sales worth tens of billions of dollars with chips for mobile phones and handheld PCs. A fall in unemployment claims across the US also boosted confidence that the economy was picking up. New unemployment applications fell for the second week in a row, to the lowest level in nearly two months, although the pace of hiring remained slow, the US Labour Department said. Initial jobless claims fell 8,000 to 380,000 in the week ended May 12th, down from a revised 388,000 in the previous week.
