Tech stocks get a rise off a solid first-quarter earnings session.
Market indices like the
and the Nasdaq telecom index were up 1% and 2% respectively Wednesday as investors embraced tech stocks.
was up 8%,
was ahead 3% and
was rising 4% Wednesday amid a broad rally.
"Concerns were escalated going into the quarter about weakness in North America, but what we saw is that IT growth is still healthy," says one hedge fund manager who owns
. "And that makes sense because global growth is still healthy."
So far, there have been no huge earnings disasters among the bigger tech names. In fact, outfits like Nortel
guided slightly up for the year.
beat and raised its targets in customary fashion, comfortably sidestepping its ongoing legal battle with
, the regrouping Internet equipment maker, managed to clear the earnings estimate bar, giving fans some confidence in the networking gear sector.
One of the stronger themes emerging from the past two weeks is the growth of video and the optimistic outlook on fiber-optic spending to accommodate the traffic surge. Expansion efforts by telcos including
and cable companies like
have fueled a jump in sales projections.
Qwest said Tuesday that it was going to take a page from
network upgrade plan and push fiber-optic cable deeper into neighborhoods to deliver consumers
New orders convinced cable maker
to reopen half a fiber-optic plant that had been closed in the wake of the telecom collapse in 2002. And cable gear supplier
raised its sales goals for the year, citing big orders ahead from AT&T and Qwest.
"Last year, everyone had been looking for the market to go down," says the New York hedge fund manager. "Then we had the whole subprime selloff, which gave us a minor correction. And now, even though the market has been up since then, we are still in a relatively healthy phase in terms of valuations," he said.
"The fundamentals are not bad," he continued, "and with the prospect of the
easing the interest rates, I think people want to be in big-cap tech stocks."