Tech Rally Boosts LR Index
The markets received the first boost when President Bush today pledged a mind-boggling $75 billion economic stimulus package, and the Nasdaq Composite Index saluted him with a rise of nearly 6 percent. Then Cisco Systems Inc. (Nasdaq: CSCO) CEO John Chambers told attendees at a Goldman Sachs conference that he was “very comfortable” with first-quarter financial estimates for his company, which was enough to let networking stocks turn on the afterburners.
The Light Reading Index scoring double-digit gains, closing up 15.12 (10.98%) to 152.81, helping to dig itself out of a long-term rut.
Not surprisingly, Cisco was one of the big winners, closing up 2.47 (22.52%) to $13.95. But rival Juniper Networks Inc. (Nasdaq: JNPR), one of the most tarnished large-cap technology companies, was an even bigger winner, up 2.47 (25.92%) to 12.
Other notable names on the Index closed with gains of 20 percent or more. Communications chips were big winners. Applied Micro Circuits Corp. (AMCC) (Nasdaq: AMCC) was up 1.40 (22.26%) to 7.69, and fellow chipmaker PMC-Sierra Inc. (Nasdaq: PMCS) leaped 2.19 (22.14%) to 12.08. Brocade Communications Systems Inc. (Nasdaq: BRCD), a supplier of storage networking gear, climbed 3.68 (27.40%) to 17.11. Optical equipment maker Ciena Corp. (Nasdaq: CIEN)zoomed 2.52 (26.50%) to 12.03.
Stockholders in Extreme Networks Inc. (Nasdaq: EXTR) were extremely happy with their stock rising 1.42 (22.12%) to 7.84. Harmonic Inc. (Nasdaq: HLIT) shareholders felt harmonious vibes as their stock went up 1.94 (26.54%) to 9.25.
Perhaps not coincidentally, Chambers’ comments came a day after rival Nortel Networks Corp. (NYSE/Toronto: NT) announced it was slashing 20,000 more jobs and replacing its CEO. But as the market beamed today with a self-confident glow not seen in months, even badly bruised Nortel rewarded investors with a 0.25 (4.73%) gain to 5.54. And nearly as surprising, Alcatel SA (NYSE: ALA; Paris: CGEP:PA), after announcing today a cutback in underseas cable installations resulting in 3,000 job cuts, was up marginally to 11.35.
The Index’s only loser today, Digital Lightwave Inc. (Nasdaq: DIGL), was slammed hard after warning of a third quarter loss due to "softness in telecommunications spending and a weak overall economy." The stock was down 3.62 (40%) to 5.40.
— Tom Davey, special to Byte and Switch, http://www.byteandswitch.com