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HolidayBuyer's Guide
Tech Industry

MARKET PREVIEW: IBM&#039s move shifts competition for chips

Competitive friction between Intel and IBM may motivate techs Thursday, though the three-day weekend ahead is apt to thin trading out. Asia and Europe were down, and the Dow is set to open lower.

U.S.

More strategic shifts from IBM have positioned it to lock horns with Intel. After announcing Tuesday it would sell off some aging network equipment lines to Cisco Systems Inc. (Nasdaq: CSCO), International Business Machines Corp. (NYSE: IBM) outlined plans to supply chips to the communications industry. This sets the stage for major rivalry with chip giant Intel Corp., (Nasdaq: INTC) which has also just moved in to the same market.

Global Crossing Ltd. (Nasdaq: GBLX) is sweetening its bid for Frontier Corp. (NYSE: FRO) to ensure completion of their merger. Global Crossing will reportedly offer to exchange two of its shares for each share of Frontier, in order to make up for the fact its stock has fallen 50% during the past three months. It is currently below a "collar" of $34.56, meaning Frontier could cancel the deal.

In economic news, the Commerce Department's July report on factory orders is slated for release. Estimates call for a 1.8 percent increase, compared with 0.7 percent growth a month earlier. But markets are eyeing Friday's jobs report for more significant indicators of the economy's growth. Weekly jobless claims, which are expected to rise to 289,000 for the week ended Aug. 28, up from 283,000 a week earlier.

Expect the following technology stocks to be among Thursday's most actively traded issues: Frontier Corp. (NYSE: FRO), iVillage Inc. (Nasdaq: IVIL), Juniper Networks (Nasdaq: JNPR) and Tech Data Corp. (Nasdaq: TECD).

Blue-chip stocks made decent gains Wednesday, lifting the Dow Jones industrial average 108 points to 10,936.93 while the tech-laden Nasdaq composite only moved up 11 points to 2,750.81.

At the Bell

The Dow Jones industrial average may open about 63 points lower. The Standard & Poor's 500 index for June futures contracts slid 7.6 points to 1326 at 7:25 a.m. EST in 24-hour electronic trading.

The Inter@ctive Week @Net Index rose 2.24 to 296.62.

Asia

Trading in Asia was on a downswing. The Nikkei 225 fell 0.96 percent to 17,631, Singapore's Strait Times index lost 0.19 percent to 2,118 and Hong Kong's Hang Seng shed 1.30 percent to 13,368.

Europe

European markets were also in the red. London's FTSE 100 fell 0.65 percent to 6,326. The CAC 40 in Paris slipped 1.03 percent to 4,586 and the Xetra DAX in Frankfurt was down 1.58 percent to 5,233 at 7:00 a.m. EST.

Reuters contributed to this report.