By Rex Crum
Tech stocks posted broad gains in early trading Wednesday, as much of the sector rose in advance of congressional testimony from U.S. Federal Reserve Chairman Ben Bernanke.
Bernanke is scheduled to begin two days of testimony in which he is expected to assure Congress that the Fed's monetary policy is solid and helping to improve the U.S. economy.
Tech stocks turned their backs on the previous day's losses, with gains coming from Research In Motion Ltd. (RIMM), Apple Inc. (AAPL), Intel Corp. (INTC), Cisco Systems Inc. (CSCO) and Hewlett-Packard Co. (HPQ).
Design-software maker Autodesk Inc. (ADSK) climbed $2.47 a share, or 9.6%, to $28.12 after earlier reaching a 52-week high of $28.36. Late Tuesday, Autodesk reported a fourth-quarter profit of $50.1 million, or 21 cents a share, on revenue of $456 million, turning around from a year-ago loss. Excluding one-time items, Autodesk earned 30 cents a share to top Wall Street analysts' forecasts.
Needham & Co. analyst Richard Davis raised his rating on Autodesk's stock to buy from hold, saying the long-term outlook for the software company remains positive.
While Autodesk was performing well, STEC Inc. (STEC) shares were crushed, falling $3.44, or more than 25%, to $9.96.
STEC, which makes solid-state memory storage products, suffered at the hands of its own forecast, and inventory carry-overs from its largest customer, EMC Corp. (EMC). Late Tuesday, STEC said that a previously announced carryover of orders from EMC could continue through the first half of 2010 and put a damper on its overall sales.
STEC also said that for its fiscal first quarter, it expects to earn between 11 cents and 13 cents a share, on revenue of $33 million to $35 million. Analysts had forecast the company to earn 20 cents a share on $70.3 million in sales.
At least three analysts that cover STEC cut their ratings on the company's stock.