Dell Rings The Bell
Dell Computers
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PowerRating) sprang out of the gates
on the opening bell, following up yesterday’s expansion bar with a 10% gap
opening. The strong opening from one of the biggest players in a beleaguered
sector, personal computers, is leaving the impression that the situation in
tech may not be as bad as many have feared.
The Nasdaq is up 40.39 at 1621.49, the S&P 500 is
up 5.55 at 1077.98, and the Dow is up 13 at 9137.
Dell said it would meet its Q3 projections and earn
15 to 16 cents per share. Other battered computer markers are also rallying
on Dell’s reassuring outlook. Compaq Computers
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PowerRating) is up .32 at 8.97
and Gateway
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Other brand name Nasdaq issues are up in sympathy, in
part on the view that the worst may be over for the tech sector. Intel
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PowerRating),
a supplier of chips to PCs is up a 4%. And standard-issue software maker
Microsoft
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PowerRating) is up 2.5%.
The market continues to show resiliency from last
Friday’s follow-through day, and last Monday’s second .50% interest cut. A
follow-through day — a move in a major index of more than 2% on rising
volume in the days following a major low — has worked to bring more
institutional money off the sidelines. Monday’s rate cut also provides
tremendous liquidity and potential fuel to the market.
But news is beginning to trickle in that the worst
may not be over for broad segments of the economy. Jobless claims surged,
accelerating at their fastest pace in nine years. The Labor Department said
the rise of jobless claims from 71,000 to 528,000 was due to mass layoffs in
the airline and travel industries. In New York City alone there were 10,000
claims for unemployment benefits, nearly half the direct result of the
destruction of the World Trade Center.
The rising number of unemployed will likely constrain
demand and the rally in the stock market at some point.