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
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions