Technology stocks fell today alongside the broader market, as investors await earnings reports from tech bellwethers Dell Inc.(DELL) and Hewlett Packard Co. (HPQ). A three day rally ended in a retreat as the cloudy economic outlook prevented stocks from heading much higher until further news.
Among the companies that were able to ascend in spite of anxiety over the direction of the market was Dell, which climbed in advance of earnings reports expected for today after the bell. Investors appeared to be optimistic regarding the company’s July reports which will factor in the recent turmoil and its impact on corporate spending more than the month’s prior were able to. Optimistic investors who seemed to think Dell would be unscathed by the tumult were corrected afterhours. Dell’s earnings report which did see profit up $63 million for the period, but adjusted its guidance lower, leading shares down sharply in afterhours trading
Corporate spending has been a major driver for the technology sector, specifically for companies like Dell and Hewlett-Packard. The weaker guidance indicates that Dell believes corporations will be cutting back on their tech spending, which would impact tech outfits from semi-conductors like Intel (INTC) to other PC makers.
Tech stocks did not need help losing ground today. Major semi-conductor companies were lower across the board with Intel (INTC), Texas Instruments (TXN), Broadcom (BRCM) and Analog (ADI) lower on high volume.
Elsewhere, even tech goliaths like Google (GOOG) fell today in the aftermath of the company’s announcement that it would purchase Motorola. The Motorola/Google powerhouse has some investors suspecting Apple’s dominance could be under siege. Apple’s iPhone accounted for 21 percent of market share against Motorola’s five percent. The $12.5 billion dollar purchase by Google; however, could prompt shifts that could offset that ratio.
Apple (AAPL) also declined in trading today after Taiwan’s HTC Corp. filed a complaint against the smartphone maker alleging that Apple infringed on wireless technology patents belonging to HTC. The move could be an attempt at repartation by HTC who will be under heightened pressure after the Google Motorola purchase is final.