Waiting for Capex Comeback

Intel (INTC), which posted disappointing earnings and guidance last week, might be the victim of too much capacity in an already competitive pricing environment for chip manufacturing.

Broadcom (BRCM), which reports earnings on Thursday, however, has adopted a strategy of growth through acquisitions (it announced a deal to buy Sandburst for $80 million on Monday), instead of boosting capacity.

Others that may be more likely to boost capex spending are commodity-based firms, such as mining and energy companies, which have good reasons to expand exploration and production to meet soaring demand for their goods.

While it's hard to determine how much of such capex spending would find its way back into the U.S. economy, some that have engaged in such expansions are so far meeting with operational difficulties, as was seen in Phelps Dodge's (PD) disappointing earnings two weeks ago.

While ConocoPhillips and Amerada Hess posted blowout earnings growth Tuesday, they made no bullish promise to boost capex spending. And ConocoPhillips' production of 1.88 million barrels per day was fairly flat from the year-earlier level.

Meanwhile, an Exxon Mobil (XOM) official is telling congressional aides that due to forecasts of flat U.S. demand for gasoline through 2030, there is no need to build new U.S. refineries, Reuters reported Wednesday.

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