New York Market: Apple leads computer shares surge

COMPUTER stocks rebounded last week on expectations that their earnings will outperform. More gains may lie ahead, at least for some. Advances "will be earnings-driven on a case-by-case basis", said Susan Flischel, at Countrywide Investments in Cincinnati. "Companies reporting positive news will be rewarded."

Apple Computer could be among the winners. The company said last week that demand for the new iMac personal computers, which come in five colours, is exceeding the company's most optimistic forecasts. The iMacs are the best-selling PCs in the US, Japan and France. Gateway 2000, the second- biggest direct seller of PCs, also is expected to have higher earnings.

The PC stocks that lost the most in recent weeks may not share in the renewed enthusiasm for technology issues. Dell Computer is still down 25 per cent since mid-February, when it reported the slowest revenue growth in two years. Compaq is down 23 per cent since warning of slower January sales. There will be "a lot of volatility going on until you get through the first quarter and the bellwethers report in line or above expectations", said Andrew Damm, a fund manager with BlackRock.

Compaq and Dell are both expected to report quarterly profit gains, though less than analysts initially expected. Microsoft may gain on earnings expectations. Stock prices "are driven by earnings, and tech stock earnings growth is still better than in other sectors", said Ted Bridges, at Bridges Investment Counsel. The 61 "technology" companies in the S&P 500 are expected to report 34 per cent earnings growth in the first quarter compared with an expected 6.4 per cent growth for the entire index.

The S&P's 500 Index dropped 1.3 per cent and the Nasdaq was little changed, falling less than 0.1 per cent. The Dow Jones Industrial Average closed at 9822.24, down 175 points from the previous week.

After early stumbles, internet-related shares recorded some of the best gains. Some investors expect more to come. AboveNet Communications, which helps businesses use the net, added 70 per cent for the week. InterVU, which helps companies broadcast over the net, gained 36 per cent.

Some investors are sceptical that the gains can last. "It's a lot of value investors getting into stocks they wanted to own at lower prices," said Scotty George, at Corinthian Partners Asset Management. "They are so overvalued, the rally can't be sustained."

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee