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Markets & Stocks
Hardware to hurt Wall St.?
January 12, 2001: 9:12 a.m. ET

Gateway shortfall, HP warning cloud tech stocks; U.S. producer prices rise
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NEW YORK (CNNfn) - A big earnings miss by computer maker Gateway and a warning from Hewlett-Packard may offer an obstacle Friday to the recent rally in U.S. tech stocks.

Early indications point to a mild drop for the tech-laden Nasdaq composite index, since Nasdaq-100 futures were slightly lower after taking fair value into account. Standard & Poor's futures rose 2.50 points to 1,337, and after factoring in fair value, pointed to a small opening gain for the Dow Jones industrial average.

Early economic reports were mostly stronger than expected, also clouding the stock outlook. The Labor Department's Producer Price Index was unchanged in December, but the core rate excluding volatile food and energy prices rose 0.3 percent, higher than the 0.1 percent increase forecast in a Briefing.com survey.

The Commerce Department said December retail sales rose 0.1 percent, far stronger than the 0.5 percent decline forecast by economists.

Investors will also see Friday how Wall Street responds to the completion of the $111 billion merger of online service provider America Online and media conglomerate Time Warner.

graphicGateway (GTW: Research, Estimates) said late Thursday that fourth-quarter earnings came in well below what analysts surveyed by First Call expected, and the computer maker warned that 2001 will be below expectations. As a result, it's reducing its work force by more than 12 percent. The company's shares fell $2.65 to $20.25 in before-hours trading Friday.

Hewlett-Packard  (HWP: Research, Estimates) said it will earn between 35 cents and 40 cents a share for the first quarter ending this month, below the 42-cent consensus of analysts surveyed by First Call. HP, a Dow component, dropped $1.57 to $30.81 in after-hours trading Thursday after rising 62 cents in regular hours.

For the first time since last August, the Nasdaq composite index is carrying a three-session winning streak into a trading day, having risen more than 4.6 percent Thursday to 2,640.57. The Dow industrials advanced for the second day in a row, up just 5 points to 10,609.55. The S&P 500 added about 1 percent to 1,326.82.

Major Asian markets closed with solid gains Friday. Europe's biggest bourses started the day with broad advances.

Treasury prices were mostly lower early Friday. That boosted the 10-year note yield to 5.13 percent from 5.12 percent late Thursday; the 30-year bond's yield rose to 5.58 percent from 5.55 percent.

The dollar edged up against the yen and down against the euro. Oil futures in London rose 1 cent to $25.37 a barrel.

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AOL Time Warner (AOL: Research, Estimates), as the merged company is now known, rose $1.27 to $48.50 in before-hours trading Friday after the Federal Communications Commission approved the online service's merger with Time Warner, the media conglomerate that's the parent of CNNfn. AOL rose $2.34 Thursday as talk of the commission's approval spread.

There was at least one positive surprise in the technology sector, as Internet ad company DoubleClick (DCLK: Research, Estimates) broke even for the fourth quarter. Analysts expected a loss of about 2 cents a share. But DoubleClick expects to lose 7 cents to 9 cents a share in the first quarter, a worse showing than the 6-cent loss forecast, because of lower media revenue.

DoubleClick rose $1.95 to $13.20 in before-hours trading Friday after a  $1.19 drop Thursday.

But there were more echoes of the recent troubles in the tech sector  Friday morning, as NCR  (NCR: Research, Estimates) said a struggling retail sales environment will hurt its fourth-quarter revenue -- with earnings for the retailer technology maker's quarter coming in below Wall Street expectations. 

NCR shares rose 25 cents to $49.06 Thursday. graphic

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.