HEXUS.sharewatch: The rich get richer

The last HEXUS.sharewatch was on 4^th April. Despite the fact that the sub-prime crisis has kept throwing-up further pieces of bad-debt bile, the Dow and NASDAQ have both posted modest gains since then.

So there is little need to adjust for the overall economy in analysing share-price movements this time; a drop, even in relative terms, is indeed a drop.

Among the gainers, Google was the big winner after it reported better than expected quarterly earnings. Reports that there was a slowing in the growth of clicks on Google ads had led to a big drop in its share price since the start of the year. The earnings news implies this was an over-reaction.

In the strange way these things do, the Google news will have had a positive effect on other tech stocks, although the news that US PC sales aren’t being as negatively affected by the recession many people already assume the US to already be in has helped. Other gainers include Apple, IBM and Intel.

Apple’s quarterly earnings announcement is due this week, but so are those of Microsoft and Yahoo!. This could get interesting as, if Yahoo! underperforms, this will weaken the incumbent board’s position further and put more pressure on them to capitulate or face a proxy fight.

AMD’s further trials and tribulations don’t seem to have had too much of an effect on its share price, but it had really better show some improvement in its product execution soon.

When a CEO launches a broadside against a company that is both twelve times bigger than his and a key partner, it’s hardly surprising to see his company’s share price drop – and this is exactly what has happened to NVIDIA.

The big loser in our list, however, was distributor Avnet, which reported below expectation quarterly earnings. Roy Vallee, chairman and CEO of Avnet, said in the report: ‘We are extremely disappointed with our earnings as a confluence of issues contributed to a very difficult quarter.’

*All prices are those at close of trading on the date specified.