Techs look for good news
With the Federal Reserve news out of the way and a long list of profit warnings awaiting them, tech investors could have a hard time finding something to cheer about. The Dow is set to open slightly higher.
The Nasdaq had a muted celebration Wednesday on news that the Federal Open Market Committee decided to cut interest rates by a quarter percentage point. Many economists and investors were hoping for a half-percentage point cut.
With a long list of profit warnings to ponder, investors in technology stocks may have a hard time mustering enthusiasm. The only economic news to consider is the weekly initial jobless claims report. The Labor Department is slated to report the data before the opening bell. Jobless claims are expected to show that the number of filings rose to 420,000 from 400,000 the previous week.
The broader markets may get excited over news that the General Electric-Honeywell International merger could go through after all. GE executives confirmed that talks with European Commission officials are in progress to help diminish opposition to the $41 billion deal.
Stocks to watch • Macromedia said it would report a loss instead of a profit in its first quarter. The software maker is predicting a loss of 15 cents to 20 cents per share before one-time restructuring and acquisition charges. First Call's earnings estimates were for a profit of 13 cents a share. Macromedia also said revenue would be between $85 million and $90 million.
• Redback Networks also cut estimates for its second quarter. The maker of telecommunications gear said its pro forma loss would be 27 cents to 32 cents per share on revenue of $55 million to $60 million. Analysts, according to First Call, expected a loss of 11 cents per share on revenue of $88 million.
• Altera joined a growing list of troubled chipmakers with a profit warning and news of layoffs. The company said it would cut 152 jobs and reiterated that second-quarter sales will be down about 25 percent from the first quarter. The maker of programmable computer chips competes with Xilinx, a company that issued warnings Tuesday.
• Corel reported strong revenue and a surprise profit in its second quarter. The software maker, known for its WordPerfect product, said revenue was $36.0 million and profit was 2 cents a share. That's up sharply from a loss of 36 cents a year ago, and well above First Call's estimate for a loss of 6 cents a share.
Microsoft also said Wednesday it would work with Corel to build shared-source-code versions of Microsoft's C# language and associated programming components for Microsoft.Net.
At the bell
The Dow Jones industrial average may open 17 points higher. The Standard & Poor's 500 index for June futures contracts was up 2 points to 1221 at 7:15 a.m. EDT in 24-hour electronic trading.
Reuters contributed to this report.