Tech stocks rose this week on the back of solid economic news and some upbeat results from software vendors, including Red Hat and Oracle.
The Nasdaq Computer Index closed Friday at 2005.41, up 20.95 points for the day and 37 points for the week. Major exchanges and indexes also closed higher.
On Friday, the U.S. Commerce Department said that gross domestic product increased at a 4.1 percent annual rate, revising the earlier estimate of 3.6 percent. The new figure means the economy grew at its fastest pace in two years.
Earlier in the week, the U.S. Federal Reserve said it would start to taper its bond-buying program, designed to spur the economy, since growth appears to be more stable than it has been over the last few years. However, it also said it would keep interest rates low in an effort to continue to encourage growth, and that it would not end its bond-buying program completely.
Tech vendor earnings were mixed this week, but there were some bright spots. For the tech sector, Oracle’s quarterly earnings report and the announcement Friday that it would acquire business-to-consumer marketing software vendor Responsys for US$1.5 billion were the financial highlights of the week.
Responsys’ technology will help Oracle provide chief marketing officers with a one-stop shop for both business-to-consumer and business-to-business marketing campaigns, the company said. Oracle has been on a buying spree.
Earlier in the week, Oracle reported that revenue for its second fiscal quarter increased 2 percent year over year to $9.3 billion. Net income declined 1 percent to $2.6 billion.
However, excluding one-time charges, earnings per share were $0.69, better than the $0.67 forecast by analysts polled by Thomson Reuters. Revenue also topped analyst estimates. One piece of good news: The company said orders for cloud-based software increased 35 percent.
Open source enterprise software vendor Red Hat reported that quarterly revenue rose 15 percent year over year to $397 million, while net income rose to $52 million from $35 million.
”Strong demand in Q3 for our core Red Hat Enterprise Linux and JBoss Middleware technologies led to results that exceeded guidance across several key financial metrics,” CEO Jim Whitehurst said in a statement.
Middleware and analytics vendor Tibco said quarterly revenue was $315.5 million, up from $265 million a year earlier. Net income, however fell, to $44.5 million from $48.8 million.
”We are building momentum as we enter 2014, and I am very optimistic about our prospects in the year ahead,” Chairman and CEO Vivek Ranadive said in a release. However, the company said it now expects revenue of $247 million to $253 million for the current quarter, below the consensus analyst estimate of $255.3 million.
Meanwhile, tech market observers had a keen eye on BlackBerry Friday as the beleaguered phone maker said it lost $4.4 billion in the three months ending in November, compared to a net profit of $9 million in the year-earlier quarter. Revenue was $1.2 billion, down 56 percent.
A loss had been expected, so the big news was that BlackBerry will be working with Foxconn, the world’s largest contract manufacturer of electronics, to develop handsets. This is the first step in an apparent move away from the hardware market, and a major change in strategy. Investors applauded the deal, as company shares closed at $7.22, up $0.97 for the day.
Company CEO John Chen also said he would be interested in porting some of the company’s software to the iOS and Android platforms.
Tech stocks are headed toward a strong close to the year. On Friday the Nasdaq Computer Index was up about 28 percent for the year.