Monday's Tech Recap

by: Rupert Nicholson

The tech sector began the day heavily depressed as fears from Europe continue to trouble investors. It was driven down early in the day by a bearish performance from some large cap stocks. Apple (NASDAQ:AAPL) was notably significantly down early in the day, while Facebook (NASDAQ:FB) also fell. Facebook fell to a new low in today's trading, falling as low as $26.44. However, the tech sector was bullish in later hours, finishing up 0.19% at the end of the day.

The tech sector pulled the Nasdaq down early in the day, but the Nasdaq recovered after the bullish rally by the tech sector later on. The Nasdaq finished up 0.46%. The S&P 500 similarly finished positive at the end of the day up just 0.01%. This was a sliver of a gain, however, an impressive one nonetheless as it was down almost 1% just before 1 p.m. The Dow Jones finished 0.14% down which could be a signal that investors believe large cap stocks are overvalued compared to their small cap counterparts.

Recently, the technology sector has been noticeably bearish since the start of May. However, even though it has been down, it has showed some signs of confidence over the past two weeks. The past two weeks have each started off bullish before descending into a bearish trend in the later stages of the week. This lack of clear direction has been caused by fears over Europe as the lack of confidence created by it has stopped what could have been a bullish run. Some confidence seems to be returning to the markets though if this day of trading is anything to go by. The confident showing in the middle of the day seems to have been a sign from investors that some technology stocks are very good investment opportunities at current prices.

There were some particularly good signs from a few tech stocks. Apple's recovery late in the day marked an interesting reversal which could spur the largest company in the US back to a $600 per share valuation. Almost every analyst is long Apple and for good reason after the technology stock's impressive quarterly earnings. Morgan Stanley (NYSE:MS) has a base target of $720 for Apple and a bull target of $960, meanwhile Goldman Sachs (NYSE:GS) has a price target of $750. However, if you want to look at other stocks, I have been consistently confident about Nokia's (NYSE:NOK) future. The ailing mobile phone company should not be at its current valuation. With a price/sales ratio of 0.20, it is perhaps the most exciting tech stock to look at buying for heavy future returns.

Top Gainers

  • ExactTarget (NYSE:ET) up 11.66%
  • Inphi Corporation (NYSE:IPHI) up 8.89%
  • AuthenTec (NASDAQ:AUTH) up 8.75%
  • Mitel Networks Corporation (NASDAQ:MITL) up 8.29%
  • Concur Technologies (NASDAQ:CNQR) up 6.95%, but down 0.46% after hours

Top Losers

  • Velti (VELT) down 8.86%, but up 0.16% after hours
  • Trina Solar Limited (NYSE:TSL) down 8.35%
  • Envivio (NASDAQ:ENVI) down 7.78%
  • MEMC Electronic Materials (WFR) down 7.56%, down a further 0.63% after hours
  • Valence Technology (VLNC) down 7.49%, down a further 6.63% after hours

Key Events

  • Facebook has announced that it might allow children under the age of thirteen to make use of its social networking site. They would only be able to access the site under parental control and the social network wants to be able to link their accounts to their parents. This marks an important change in the company's policy which some have argued is a dangerous step to take. However, many under-13 children already access the site in violation of Facebook's rules so it is not clear how big an impact this will actually make if it goes ahead. This move from Facebook is likely an attempt to boost user numbers to make the site more attractive to traders as it is now a publicly traded company. (here)
  • Asus has released new tablet, laptop, and monitor designs which will utilize Windows 8, the newest operating system. Its centerpiece announcement was the release of a hybrid laptop-tablet device labeled the Transformer Book. This step by Asus might well revolutionize the industry as companies are currently looking for the coup de grace of the computing industry, a system which integrates the best qualities of computers and tablets. (here)(here)
  • Microsoft (NASDAQ:MSFT) has announced an ingenious new step which allows its tablets and smart phones to communicate with its Xbox gaming console. The Xbox SmartGlass allows a user to control his gaming experience on an Xbox through his/her tablet or smart phone. This places Microsoft's gaming system into direct competition with Nintendo's (OTCPK:NTDOY) Wii U gaming console. This step by Microsoft might be very attractive for its users as no new hardware will be needed for the system to work. (here)

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.