Google Shares Close Over $400 for First Time Since October
Shares of Google closed above US$400 in the U.S. on Monday for the first time since stock markets there started precipitous declines last Fall.
Stock in the world's largest Internet search engine operator climbed 2.1 percent on the Nasdaq stock market to close at $401.98 on Monday. That's the first time the stock has closed over $400 since Oct. 1, when it finished at $411.72.
U.S. stock markets have surged since reaching lows in early March, partly due to an apparent return to profitability by banks as well as signs business may be stabilizing.
But a number of analysts remain wary of the stock market rise because of how shaky the markets have been over the past several months and because it's too early to call a firm rebound.
The current rise in technology sector stocks is partly the result of demand for gadgets being better than feared during the first quarter, according to a report by Credit Suisse.
Companies had anticipated a terrible quarter and cut back on production, the researcher said. But since demand was not as bad as feared, many companies are scrambling to buy components to restock depleted inventories.
The fear is that this purchasing for inventories could overshoot and if demand in the fourth quarter, which includes the important holiday shopping season, fails to see people buying lots of smartphones and other gadgets for Christmas stockings, then the technology industry could dip again.
CLSA Asia-Pacific Markets expects true end demand for technology devices not to return until the middle of 2010, according to analyst Bhavtosh Vajpayee, and is warning investors to beware of a dropoff in company performance after inventory restocking slows later in the third quarter.