By Rex Crum
Technology stocks added to their gains in afternoon trading Wednesday as Federal Reserve Chairman Ben Bernanke appeared before Congress to detail his outlook for the U.S. economy.
In the first of two days of congressional testimony, Bernanke said that the Fed needs to maintain its current course on interest rates and that the economic recovery its still dependent on consumer confidence and spending patterns.
Tech stocks turned away from the previous session'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).
One of the day's standouts was design-software maker Autodesk Inc. (ADSK) The company's shares remained up by $2.59, or 10%, to $28.25 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, reversing a year-earlier loss. Excluding one-time items, Autodesk would have earned 30 cents a share, ahead of analysts' consensus forecast.
Needham & Co. analyst Richard Davis raised his rating on Autodesk to buy from hold, saying the long-term outlook for the company remains positive.
Micron Technology Inc. (MU) also put in a strong performance, as the memory chipmaker's shares climbed 54 cents, or more than 6%, to $9.15.
While Autodesk and Micron were performing well, STEC Inc. (STEC) shares got crushed, falling $3.31, or more than 24%, to $10.11.
STEC, which makes solid-state memory storage products, suffered at the hands of its own forecast as well as inventory carryovers from EMC Corp. (EMC), its largest customer. 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 overall sales.
STEC also said that for the 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 would earn 20 cents a share on $70.3 million in sales.
At least three analysts who cover STEC cut their rating on the stock.
Garmin Ltd. (GRMN) shares also retreated, falling $2.43, or 7%, to $32.02.
Late Tuesday, the maker of GPS and personal-navigation devices warned that profit margins this year could be hurt by falling prices and more competition.