Advanced Micro Devices Inc (AMD)

[rupert]

Tech Stocks Still Lead the Market
Saturday May 29, 12:11 pm ET
By Michael J. Martinez, AP Business Writer
Stocks of Large, Stable Technology Companies Leading the Market


.........."As we get out of this correction, the second leg up of this bull market will be fueled by the larger tech companies," said Ken Tower, chief market strategist for Schwab's CyberTrader.........With the economy continuing its robust growth, corporations have been setting aside more money for capital expenditures such as technology purchases. That bodes well for tech firms, which stand to see profits grow thanks to corporate spending on new workstations, servers, networks and software.....However, tech's former leaders, such as semiconductors and networking, are still too closely tied to the vagaries of the market. While they may indeed forecast Wall Street's ups and downs, they won't be the ones to lead an upside swing.

Semiconductors -- the microprocessors at the heart of every piece of computer hardware -- should enjoy the biggest gains coming off of their March and April lows. Worldwide chip sales have had double-digit growth each month since the beginning of 2004, and demand should keep those sales robust.

Those gains are coming, in part, because semiconductors were hit hardest in the recent market correction. And some of those second-half gains could already be priced into stock prices, analysts said.

Since topping off for the year at $32.04 per share on Jan. 12, Intel foretold the market's correction through February and March, bottoming out at $26.03 on April 20. Since then, Intel Corp. has risen 9.7 percent, closing Friday at $28.55 per share. As the market continues to improve, analysts believe Intel and other chip stocks will continue to rise, but can still fall victim to the market's volatility.

"Semiconductors have risen to the top just recently because they got so beaten down earlier," said Richard A. Dickson, senior market strategist at Lowry's Research Reports. "They might be worth holding onto to make up for earlier losses, but they're still vulnerable."





http://biz.yahoo.com/ap/040529/weekly_wall_street_3.html