First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.
Wall Street Beat: Tech stocks jump as market indexes hit milestones
- — 03 May, 2013 21:19
On the back end of an earnings season that by many accounts could have been worse, tech investors appeared to be in the mood to celebrate on Friday, sending shares of IT companies higher as key stock-market indexes hit milestone highs.
Both the Dow Jones Industrial Average and the Standard and Poor's 500 index hit never-before-reached round numbers. The Dow hit 15,000 points before closing slightly lower for the day. The S&P gained 1.05 percent to close at 1614.42.
All five of the Dow's tech stocks rose: Hewlett-Packard by $0.18 to close at $20.63; Intel by $0.70 to close at $23.92; IBM by $2.12 to close at $204.51; Microsoft by $0.33 to close at $33.49; and Cisco by $0.10 to close at $20.83.
The Nasdaq Computer Index joined in the general exuberance, rising 0.92 percent to close at 1646.61.
Several key employment figures helped boost investor confidence. On Thursday, the U.S. Department of Labor reported that unemployment benefit applications fell last week to 324,000, the lowest since January 2008, before the virtual implosion of Wall Street in September that year. Then Friday, the employment report for April showed that 165,000 new jobs were added to the U.S. economy, a greater number than expected, and that the unemployment rate declined slightly to 7.5 percent.
The macroeconomic news appears to be boosting confidence in all sectors at a time when investors were expecting the worst. Just last week, market research firm Forrester Research reduced its forecast for U.S. business and government spending on IT goods and services in 2013 to 6.2 percent, from its January 2013 projection of 7.5 percent.
The main reason for the reduced forecast was the U.S. government cuts of about $65 billion in federal spending over the next six months as part of the so-called sequestration budget compromise.
So far this earnings season, results have been mixed, but bellwether vendors for the most part have reported better-than-expected earnings. This week, some marquee names in social networking weighed in with first-quarter reports, highlighting the importance of the mobile market.
The big tech earnings announcement this week was Facebook's, which on Wednesday reported that for the quarter ending March 31, total revenue jumped 38 percent year over year to $1.46 billion. But net earnings did not rise nearly as high, increasing only 7 percent to $219 billion. Costs cut into profit, rising 60 percent year over year, driven primarily by infrastructure expense and increased headcount, Facebook said.
Facebook is snapping up programmers as fast as it can in a race to figure out how to monetize its vast user network, which is quickly moving to mobile devices. Questions remain about whether Facebook can keep up with this shift and whether users will be as fond of installing apps on mobile devices as they are visiting websites from desktops.
"On desktop Web, most ads encourage you to visit a new website," said CEO Mark Zuckerberg, on the company's earnings call, according to a transcript from Seeking Alpha. "On mobile, it makes sense that most ads encourage you to visit apps instead. And in order to visit apps you first need to install."
In the first quarter, Facebook's desktop ad sales dipped slightly from a year ago to about $871 million, so mobile is the future. Mobile ad sales now total 30 percent of advertising revenue, up from 23 percent in the fourth quarter.
LinkedIn's earnings, announced Thursday, at first blush looked strong. Revenue for the first quarter was $324.7 million, an increase of 72 percent year over year. Net income for the first quarter was $22.6 million, compared to net income of $5 million for the first quarter of 2012. But the online professional networking service forecast a slowdown in growth.
Like Facebook, LinkedIn is hiring more workers and investing in infrastructure like data centers. Also like Facebook, LinkedIn plans to insert more ads within the stream of personal updates for its members' pages, rather than displaying them on the sides. And like every other social networking site, it is focusing on mobile. During the quarter, the company updated versions of its iPhone, Android and Web apps to focus on content personalization.
LinkedIn said it expects second-quarter revenue between $342 million and $347 million, while analysts had forecast $360 million, according to a poll by Thomson Reuters.
Yelp also showed strong gains in revenue and user numbers. On Wednesday, it said net revenue for the first quarter skyrocketed 68 percent year over year to $46.1 million. Its loss narrowed to $4.8 million from $9.7 million a year earlier.
Yelp pointed to several successes. For example, the number of average monthly users of Yelp's service jumped 43 percent year over year to 102 million, while active business accounts rose by 63 percent, to 45,000 businesses.
The company added search ads to its mobile application in the fourth quarter, and in the first quarter about 45 percent of Yelp searches originated on the mobile app, the company said.