High-tech sector gets a boost from Cisco's Chambers

The high-tech industry finally had a good day on October 3, starting with

Cisco CEO John Chambers telling Wall Street analysts that he is confident the

company will be able to meet the forecast for sales and earnings in the

company's first quarter of fiscal 2002.

''I am very comfortable with the consensus estimates,'' Chambers said about

the forecasts put out by Wall Street analysts who have forecast a 2-3 cent per

share profit on sales of about $4.16 billion. Cisco's stock rose $2.47, or 21

per cent to $13.95. Chambers' comments sent the stocks of most high-tech

companies up on the high-tech-heavy NASDAQ stock market. Even the embattled

semiconductor stocks saw healthy gains in their stock prices.

Other networking companies also rose on the coat tales of Cisco's news.

Juniper Networks, Ciena, Tellabs, Extreme Networks and Foundry Networks all saw

their shared jump 20-25 per cent The upbeat move was further boosted by the news

that President Bush is planning to ask Congress for a $75 billion economic

stimulus package that also includes new tax cuts and an increase in the minimum

wage rate.

Chambers said there was some disruption in orders after the Sept. 11 airplane

attacks on the US, but business has been good since then. In Silicon Valley, Sun

Microsystems showed signs of business returning in the form of a $100 million

order from media conglomerate News Corp. Sun will provide servers and storage

systems over the next two years.

The deal names Sun as News Corp's preferred vendor for servers running the

Unix operating system and other products for News Corp. and its global

affiliates 20th Century Fox and satellite broadcasters BSkyB in Britain and Sky

Mexico.

Sun vice president of marketing John Loiacono said the News Corp. contract

was a welcome shot in the arm, but it is too early to tell if it is part of a

new buying trend. "There really is no constant business trend line that we

have seen. But there is a lot of stiff competition out there for big deals like

this" he said. "I think everything we've seen over the past three

months, whenever we think we've seen stabilization, it just hasn't held true. So

we're still seeing fluctuation, pretty much globally," Loiacono said.

News Corp will use the new Sun hardware to build out its digital content

management operations. Sun beat out IBM and Hewlett-Packard. "The real

negotiation always comes down to squeezing us on price," Loiacono said.