FILE - In this file photo taken March 7, 2012, the Apple logo is projected during an announcement in San Francisco. Early earnings reports ease investors' worst fears about technology industry. Although reports from the industry bellwethers all featured some troubling signs, their performances indicate the technology sector is largely holding up, even as Europe's debt crisis undercuts sales and threatens to topple a still-shaky U.S. economy into another recession. Apple Inc., which has ridden the success of the iPhone and iPad to become the world's most valuable company, is scheduled to release its quarterly financial results this week. (AP Photo/Paul Sakuma, file)
FILE - In this file photo taken March 7, 2012, the Apple logo is projected during an announcement in San Francisco. Early earnings reports ease investors' worst fears about technology industry. Although reports from the industry bellwethers all featured some troubling signs, their performances indicate the technology sector is largely holding up, even as Europe's debt crisis undercuts sales and threatens to topple a still-shaky U.S. economy into another recession. Apple Inc., which has ridden the success of the iPhone and iPad to become the world's most valuable company, is scheduled to release its quarterly financial results this week. (AP Photo/Paul Sakuma, file)
SAN FRANCISCO (AP) ? That wasn't so bad, after all.
That's the sentiment among investors as they digest last week's smorgasbord of quarterly results from technology companies that included Intel Corp., IBM Corp., Microsoft Corp. and Google Inc. Although reports from the industry bellwethers all featured some troubling signs, their performances indicate the technology sector is largely holding up, even as Europe's debt crisis undercuts sales and threatens to topple a still-shaky U.S. economy into another recession.
"What you are hearing now is a huge sigh of relief," said ISI Group analyst Brian Marshall.
As they exhaled, many investors latched on to Intel, IBM, Microsoft and Google. All four of their stocks ended last week higher than they began. That was good news for the Dow Jones industrial average, which also edged upward. The index includes computer chip maker Intel, corporate technology specialist IBM and software maker Microsoft in its basket of 30 stocks that are supposed to reflect the state of U.S. industry.
As a whole, the technology sector is in better shape than Wall Street envisioned. That's especially heartening amid signs that Europe's debt woes could cascade into a financial crisis similar to the 2008 meltdown in the U.S. that deepened the Great Recession. The technology-driven Nasdaq composite index ended last week 7 percent higher than where it stood at the beginning of June.
The rally could still lose steam if other major technology companies flop in their upcoming earnings reports for the three months spanning from April through June.
Apple Inc., which has ridden the success of the iPhone and iPad to become the world's most valuable company, is scheduled to release its quarterly financial results this week. Other major technology companies on this week's earnings calendar include: chip maker Texas Instruments Inc., computer disk-drive makers Western Digital Corp. and Seagate Technology PLC, business software maker SAP AG, data storage equipment maker EMC Corp. and business software maker VMware Inc.
EMC, VMware and SAP have already revealed their quarterly results either topped or matched analyst estimates, helping to propel their stocks higher in recent weeks. Seagate has said its quarterly revenue missed analysts' targets, but its stock is still slightly higher than before the warning.
Investors haven't been as sanguine about the pratfalls of other companies. Business software maker Informatica Corp., computer printer maker Lexmark International Inc. and chip maker Advanced Micro Devices Inc. have all been severely punished for earnings letdowns in their latest quarters. Since they issued warnings about their disappointing performances, their stocks have plunged by 18 percent to 33 percent.
AMD spooked investors late Thursday with a glum forecast that included a frank assessment of the personal computer industry, which has been slumping as more people surf the Web on smartphones and tablet computers.
"We expect macro headwinds will continue for the third quarter," AMD CEO Rory Read told analysts on conference call. "We also believe the PC industry may be resetting to a new baseline and that full-year industry growth estimates will be reduced."
Intel, AMD's much bigger rival, also experienced a slowdown in the second quarter and sees sluggish conditions persisting in the third quarter. Unlike AMD, though, Intel still produced second-quarter earnings above analyst projections and investors appear confident in the company's ability to manage its way through whatever difficulty might be ahead. The same appears to hold true for IBM, which raised its earnings guidance for the second half of the year, even though it expects Europe's weakened currency to decrease revenue slightly from last year.
The swing in currency rates also represents a drag on Google's revenue growth, but the Internet search leader is offsetting some of that by tweaking its technology to aim more online ads at Web surfers most likely to click on them. The additional clicks translate to more revenue for Google.
The shift away from PCs shaped Microsoft's redesign of the Windows operating system, which runs on most desktop and laptop computers. Microsoft has tailored Windows 8 so it can also power touch-based tablet computers, including a device called Surface that the software maker plans to release to compete against the iPad.
Investors have such high hopes for Windows 8 ?due to hit the market Oct. 26? that they have been betting Microsoft will end the year with a bang as consumers and businesses snap up new machines running on the revamped operating system. Not even last week's announcement of Microsoft's first quarterly loss in its 26-year history as a public company could dampen the good vibes that have been lifting Microsoft's stock. The loss stemmed from a $6.2 billion charge for a soured acquisition from five years ago. But it was an afterthought for investors as they gaze into the future and try to figure out what's ahead.
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