Tech stocks see a brief pick-up as Apple says it's doing well in China

Tech stocks see a brief pick-up as Apple says it's doing well in China
A Nasdaq employee monitors prices at the Nasdaq MarketSite in New York. The tech-driven Nasdaq hit all-time highs last month before falling hard last week. (Mark Lennihan / Associated Press)
Shares of Apple Inc. and some other technology companies briefly roared back Wednesday as analysts pointed to the tech sector as one likely to outlast a possible rough patch in the global economy.
Apple shares closed at $103.12, down 2.5% on the day, or $2.64, to their lowest price in nearly a year. But that was much better than the $94.05 that Apple sunk to in early trading. Apple Chief Executive Tim Cook told CNBC on Monday morning that the company has seen “strong growth” in China this summer. His message that China remained a ripe opportunity, triggered a wave of confidence that sent shares soaring.
The stock market has edged downward since Thursday, driven by fears of a global economic decline after China’s currency devaluation on Aug 11.  The tech-filled Nasdaq composite index closed at 4,526.25, down about 3.8%. The S&P 500 dropped 3.9%, or 77.7 points to 1893.21.

“What you saw happen was just a reflection of a multitude of macro-events,” said Victor Anthony, senior analyst at Axiom Capital Management.  "With that said, there are some pockets of strength, particularly names that benefit from advertising, retail and infrastructure moving to the Internet.”

Among those companies are Apple and other makers of smartphone hardware. Skyworks Solutions Inc., which makes chips for iPhones and other devices, was up 1.8%, or $1.44, to $80.51. Others such as Universal Display Corp., Micron Technology Inc. and ARM Holdings had only modest losses of less than 1% Monday.
“If you’re looking for snapback potential, you’re going to get the best bang for your buck from tech,” said Alex Gauna, managing director for technology research at JMP Securities. “If that global outlook is a positive one, we’d expect tech to lead us out.”
Gauna, the analyst, noted that Apple saw double-digit sales growth even in the midst of the Great Recession.
“Our view is that this is a great stock pickers’ opportunity if you drill in with the companies with the best fundamentals,” he said.
Even if Monday’s dive when the market opened didn’t mark the bottom of panic selling, shares of many companies are at too attractive of a price to not “step up and buy aggressively now,” Gauna said.
Although China’s devaluation and softening economy drew heavy blame for the general stock market sell-off, even tech companies with no presence in China got hit.  Facebook and Google are banned in China, and Netflix has yet to launch there. Financial analysts noted that each of those stocks has enjoyed huge rallies this year, and traders who sold early in the latest downdraft were cashing in on those high prices.
Shares of Netflix, Facebook, Google and other tech companies sank deep in early trading Monday but picked up rapidly as investors sensed a buying opportunity at prices too good to pass up. They later fell slightly again.

Netflix closed down 6.8%, or $7.08, at $96.88. Facebook came in 4.6% in the red, about $4, to $82.09. Google shares were 3.73% down, $22.87, to $589.61.

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