Tech Stocks Make Gains on Broader Market Enthusiasm

Brittney Barrett  |

Stocks closed the day on a high note for the second consecutive day following the release of the latest reports on the state of the U.S. economy. Flat August growth inspired considerable chatter regarding a potential double dip, but the most recent economic data indicates that while growth is plodding, the U.S. has not entered a recession. Anxiety at how Wall St. would react in the event of more negative data had caused a slow leak out of U.S. equities that will perhaps be plugged at least until the next discharge of discouraging data. Among the sectors impacted by the decline has been technology.

In the aftermath of the news, technology stocks began to regain some of their vigor with Apple (AAPL), among the few stocks in the sector trading higher for the year, tacking on value following the launch the latest iPhone yesterday.

Apple shares did not immediately benefit from the release, which usually stirs enthusiasm among investors, as Samsung announced its own plans to attempt to ban the product in several European nations on the basis of patent violations. At present, Samsung is attempting to dethrone Apple from its top spot in terms of smartphone market share. Apple’s most recent debut of the iPhone 4s is receiving only lukewarm reviews from critics who feel the phone, aside from a new camera and processor, is essentially the same as the previous model.

Perhaps on the basis that Apple devotees will buy the phone regardless or just on broader market enthusiasm, shares of the company are on their way higher. Apple is up close to 18 percent for the year as investors seek it out as a potential safe haven.

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Trumping the gains of Apple for the day; however, was Blackberry maker Research In Motion (RIMM). While the company has continually lost customers to competing smartphone makers, talk of a buyout from Vodaphone (VOD) helped shares regain some lost territory.

Yahoo (YHOO), rose under similar circumstances on Tuesday. The company’s very public search for a buyer has helped bolster shares of the beleaguered search engine in recent weeks. An acquisition could mean a major pay day for investors who have watched shares of Yahoo slump over the years while Google has risen to ubiquity.

Speaking of Google (GOOG), shares of the company have been falling in recent trading, down over 4 percent for the month and 15.5 percent year-to-date. Anti-trust issues and other factors weakening Google’s share prices were ignored today; however, as investors helped the company regain some of its losses.

Tech investors appeared to have rose colored glasses on in late day trading, ignoring recent news and helping send shares higher. The performance of Advanced Micro Devices (AMD) exemplifies this behavior well as shares of the company ascended in spite of a downgrade to “market perform” by Bernstein Research. In September, AMD reduced its sales forecast after encountering manufacturing issues.

 Hewlett Packard (HP), got the same treatment, with shares pushing higher in spite of a note from J.P. Morgan slapping the stock with an underweight rating. The jury on H-P is still out with analysts split between those who believe the company is on its last legs and the others believing it has a chance to bounce back.

Sentiments toward H-P mirror public opinion of the U.S. economy, a fact that continues to  inspire massive volatility in the markets.


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