John J. Edwards III
This morning's Big Tech Rally, sponsored by
big upside earnings surprise yesterday, got great initial ratings but has since been put on hiatus. The
Dow Jones Industrial Average
has cooled off at midday, with IBM's boost of 9 1/2 to 151 7/8 saving the measure from a larger calamity. Profit-taking in
Procter & Gamble
is weighing things down.
Nasdaq Composite Index
similarly opened strong and gave up ground later, with
skidding badly and
trimming back to a modest increase.
IBM stunned Wall Street (and
James Cramer) with first-quarter earnings of $2.37 per share, far ahead of the
consensus estimate of $2.28. The company said good performance in services, personal computers and software compensated for weakness in mainframes and minicomputers.
One of the service areas that's quietly becoming a bigger and bigger part of IBM's revenue stream is fixing the Year 2000 problem. That's the dilemma older computers are facing in dealing with the change in two-digit date fields to "00" from "99." Smaller Y2K companies have met with propulsive stock gains but derision from sages like Alan Abelson of
and Christopher Byron of
The New York Observer
, who say the problem is overblown and will be fixed mainly by the, uh, IBMs of the world.
Which brings us to IBM itself. Stephanie Moore, an analyst at
Giga Information Group
, said IBM has been "hiring like crazy" to meet demand from its major clients for Y2K fixes. With the emphasis on
. "If you send a
request for proposals out to six vendors and IBM is one of them, IBM might not even answer the RFP because they have so much work already," Moore said.
IBM is about to launch a "really huge push" to further advertise its Y2K expertise to top clients, and that should compensate for slowdowns in other software areas in the next few years, Moore said.
, rallying today on a positive fourth-quarter earnings preview, is another large, trusted name that is getting into Y2K in a big way, she said.