Dell Statement Hurts Stock Market

Thursday saw positive and strong gains at the stock market but was almost dismantled by Dell as it posted a gloomy quarterly corporate performance report at the close of the trading.  

Dell’s Performance far from Stellar

Revenues of Dell outperformed the estimates as it posted an 11 percent growth in sales to $16.4 billion.  This figure is higher by almost $500 million than the estimates of most market and industry analysts.  However, the setback came from Dell’s profit of 33 cents per share which is below official estimates.  Dell’s shortfall in share prices was primarily caused by several internal corporate reorganizations and the restructuring implemented by the company.  New investments and ventures also contributed to the fall of Dell share prices.  The lower share was also attributed to the entry of Dell in the retail market which gives low profit margin.

The blow to the stock market however came from the press release of Dell.  In a statement, Dell said that a trend is emerging showing that the economic weakness of the IT sector was spreading throughout the world.  

Jitters Felt Across All Markets

Dell’s statement also added that that the sluggishness experienced in the US technology market is now creeping into the entire European Zone and Asia.  In effect, Dell is projecting a general weakening of the global technology market.  This sent jitters across the market and nearly negated the gains of the days trading

Notebook suffered a 10 percent drop in share prices during after-hours trading.  This negated its initial good showing of plus 26%.  Most stocks also registered strong performance at days trading after the US Department of Commerce said that the economy was stronger than initially expected.  The Department of Commerce said that the initial 3.3 percent estimated increase is way too low and could be surpassed by a revised figure.

Gainers Led Losers at the End of Trading

On Nasdaq, PMC Sierra posted a 5 percent rise along with Level 3.  Sun registered a 3 percent rise in share prices along with Juniper and Symantec.  At the New York stock exchange, VMWare compiled an average 3% rise in share prices.  

Tech companies that tumbled at the stock market include Dell, Apple Inc., Qualcomm, and NVidia.   Apple Inc. was specifically hit by the problems caused by the new iPhone roll outs and the bugs that emerged on their new smart phones.  

The three major Index posted gains.  Nasdaq gained 29 to 2411, Dow was up 212 to 11,715, and Standard & Poor’s rose 19 to 1300.  Trading volume was heavy as 3.79 billion shares were traded at the New York SE and 1.62 billion at Nasdaq.  Gainers led losers on New York Stock Exchange as well as in Nasdaq.