Investors skittish about tech stocks
Investors didn’t need more bad news to make them skittish, but for some reason this week the focus of their fears shifted to the most prominent technology stocks.
The news that may have triggered a tech sell-off was that JP Morgan downgraded both AT&T and Verizon, opined the London Stock Exchange (item here).
The major influence on stock behavior this week was probably the Obama administration’s stress tests on 19 American banks.
JP Morgan itself, along with eight other U.S. banks, passed the government’s stress test. The market seemed to disregard the evaluation of the other 10, which suggested they might not be able to weather a worsening of the global recession and would be compelled to raise capital. Financial stocks ended up leading a mild rally Friday morning.
Technology was still an issue of concern. Sector bellwether Cisco reported better than expected results and optimism for the future (story here), but that did nothing to quell investor unease. Cisco’s quarterly earnings were still down, and the market ended up dinging the company’s stock. Apple and Qualcomm stocks were also punished.
Investor queasiness about tech stocks didn’t seem to extend to MSOs, however. On Friday morning, most cable operator stocks were still experiencing mild lifts, after a couple of weeks of consistent reports of decent growth in customers, revenue and ARPU. Even with the fears about tech stocks, there was no obvious pattern in the stock values of telecom equipment vendors; some were up, some were down.
Meanwhile, demand for government debt has dropped, The New York Times noted (story here).