Hopes are evaporating that leading technology companies will offer a safe harbor this year from the economic storms swirling across Europe, Asia and the United States.
Investors should brace for some of the biggest names in U.S. software and hardware -- from Microsoft Corp and IBM to Intel Corp -- to disappoint when Big Tech begins reporting quarterly earnings next week, analysts said.
The trio's shares are all in the red for July, in the wake of earnings warnings over the past week from smaller peers, including Advanced Micro Devices Inc, Applied Materials Inc and Informatica Corp.
Corporate IT budgets have historically proved more resilient to worsening macroeconomic conditions than other kinds of spending, because businesses invest on the assumption that technology boosts productivity and helps save them costs over the long term.
But investors may have misjudged the depth of the European crisis, and with once-reliable-as-clockwork Chinese growth waning, demand in other emerging markets has not picked up enough of the slack.
The profit warnings could signal a broader pullback in orders, which means that Wall Street's earnings projections now appear over-optimistic to some outside experts.
"I don't think the companies or the... Source/Origin >> Read More