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Tech Investors See Brighter Future

By Cynthia L. Webb
washingtonpost.com Staff Writer
Thursday, November 4, 2004; 10:12 AM

Investors cheered a final verdict on the outcome of the presidential race, leaving behind their fears of a 2000-style election and boosting markets, especially stocks perceived to benefit from a continued Bush administration.

The picture for key tech policy issues, however, is less clear, as neither President Bush nor Sen. John F. Kerry paid much attention to technology during the campaign, letting the overall economic picture, the Iraq war and national security take center stage.

_____Filter Archive_____
'Incredibles' Shows Pixar's Super Powers (washingtonpost.com, Nov 5, 2004)
Bloggers Let Poll Cat Out of the Bag (washingtonpost.com, Nov 3, 2004)
Your Own Election Night Newsroom (washingtonpost.com, Nov 2, 2004)
Bush and Kerry: Real Differences on Tech? (washingtonpost.com, Nov 1, 2004)
Too Close to Call? (washingtonpost.com, Oct 29, 2004)
More Past Issues

"The Nasdaq composite hit a four-month high Wednesday as investors anticipated a victory speech from President Bush. The Nasdaq Composite Index closed up 19.54, or 1 percent, to 2004.33. Morgan Stanley's high-tech index gained 1.63, or 0.4 percent, to 465.75 and the Nasdaq 100 Index of nonfinancial stocks added 9.06, or 0.6 percent, to 1503.89," the Wall Street Journal Online reported last night. "Mr. Bush's victory could be good news in tech land: Senator Kerry's plan to curb outsourcing could have cut into technology firms' bottom line, while President Bush's pro-business tax policy will likely benefit them. ... Among some widely held tech companies, Microsoft rose 23 cents, or 0.8 percent, to $28.47 and Intel climbed 10 cents, or 0.4 percent, to $22.67, both on the Nasdaq Stock Market. Hewlett-Packard ended flat at $19 on the New York Stock Exchange, after climbing to a high of $19.48 earlier."
The Wall Street Journal Online: Nasdaq Passes 2000 Mark As Investors Cheer Bush Win (Subscription required)

"In tech as well as the broader market, the story was similar: Investors seemed relieved to have avoided the uncertainty that blemished the 2000 election, said Gabriel Erdi, an analyst for Skye Investment Advisors. 'I think that's a big thing that was basically removed in investors' eyes. It was somewhat of a worry with how close the polls were,'" TheStreet.com reported.
TheStreet.com: Tech Investors Go Shopping

"After enduring the worst tech spending downturn in a generation during George W. Bush's first four years in office, investors placed initial bets on Wednesday that the tech marketplace would improve during his second term. Tech stocks rose Wednesday but are still trading well below the highs they hit earlier this year amid doubts about the sustainability of the IT spending recovery," CBS MarketWatch.com reported. "This might be tech's time, in the short term and near term, because it's been neglected a little bit," Gordon Johnson, president and chief investment officer of Allegiant Investment Counselors, told the publication. The article continues: "Although tech spending has clearly slowed, overall conditions remain positive and valuations are relatively cheap, according to Johnson. Apart from Bush's victory, Johnson said the most important fact of the election was that it was decided quickly. 'The market hates uncertainty,' he said."
CBS MarketWatch.com: With Bush Back, Techs Rise on Hopes

CNET News.com, in its take on what the election means for the tech sector overall, reported: "Coupled with the Republican gains in Congress, the results of the 2004 election offer the president a long-awaited opportunity to consolidate his grip on power in the nation's capital -- a prospect that could, depending on the details, help or hurt the technology industry. Aside from a few spats about offshoring early in the year, technology topics have never been a priority for either Bush or Sen. John Kerry, his Democratic rival. But this week's results ensure that attitudes in Washington, D.C., toward broadband, spectrum management, taxes and Internet telephony will line up squarely behind Republican priorities through at least the midterm elections in 2006.

"That news, or perhaps the simple elimination of electoral uncertainty, spurred the tech-heavy Nasdaq to leap as much as 2 percent Wednesday before ending the day up just 1 percent after oil prices surged. In addition, the CNET News.com scorecard reviewing votes over nearly a decade suggests that Republican legislators tend to be tech-friendlier than their Democratic counterparts."

AFX News on TechNewsWorld.com said, "President Bush will face a vastly different technology economy in his second term from the one he inherited four years ago, as one-quarter of all U.S. tech jobs have been erased since the 2000 presidential election. The concerns dominating the technology landscape today include the slower long-term growth faced by important industry segments like semiconductors and business software, job outsourcing that has spread from the factory floor to the programmer's cubicle, and an assault from accounting authorities on stock options, a cherished compensation tool in Silicon Valley," the publication said. "How Washington will affect the technology world in the coming four years remains to be seen, but no one expects the industry to be ignored. 'Many people believe that technology is where our economy is strong, so for the economy to stay strong, technology needs to stay strong,' said Rick White, chief executive of TechNet, a bipartisan group that promotes public policy on behalf of technology companies."

Gary Scholsberg, a senior economist with Wells Capital Management in San Francisco, told BBC News Online that Bush "was considered more business friendly. The reaction here may have been mixed when you get outside of the economic realm. But here in the Bay Area we are very technology orientated. They do sell very heavily overseas. The dollar could come under some pressure under President Bush and overseas earnings could benefit as they are translated back to dollars. So it could be a plus for the tech industry."

The Boston Globe reported that Wall Street "celebrated in the tradition of generations of investors who believe Republican presidents are better for stocks than Democrats." But there could be gray skies ahead as soon as today, the paper reported. "Shares in Lockheed Martin Corp. of Bethesda, Md., the nation's largest defense contractor, rose more than 3 percent, to $55.89. Northrop Grumman Corp. shares jumped 4 percent, to $53.75, while shares of Waltham-based Raytheon Co., the world's largest missile maker, rose 2.2 percent, to $37.55," the Globe said. "Jon Kutler, a Los Angeles investment banker specializing in the defense industry, called the rise in stocks 'a classic knee-jerk reaction of Wall Street.' He predicted that even cherished Republican priorities like spending on a national missile defense system will have to be stretched out over more years, potentially hurting corporate revenue. Company earnings and economic data will quickly come back into focus now that the uncertainty of the election is over, investors said, perhaps as soon as tomorrow, when a new employment report is due out."
CNET's News.com: Votes Are Cast -- Time to Count the Issues
AFX News via TechNewsWord.com: In New Term, Bush Faces Scarred Tech Landscape
BBC News Online: Economists Gauge Bush Victory
The Boston Globe: Bush II: What's Next?

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