By Rex Crum
Technology stocks added to their gains as trading progressed
Wednesday, as Federal Reserve Chairman Ben Bernanke detailed 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).
A standout were shares of design-software maker Autodesk Inc.
(ADSK), which rallied $2.76, or nearly 11%, 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.
While Autodesk was 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 ratings.
Shares of Garmin Ltd. (GRMN) 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.