The roller coaster ride for tech stocks grew even wilder today, but in a good, adrenaline-rush kind of way.
The news is mostly all good, with Banc of America Securities issuing a report that boosted semiconductor companies, stating that "a modest inventory build-up has eased".
That's all investors needed to know, as shares of tech stocks rose en masse, with Intel, up 4% after the Banc of America news hit the trading floor, and Apple the big winners. The tech sector was also buoyed by a JP Morgan analyst report that upgraded Apple's profit forecasts. That shot Apple's stock up 2%.
Overall, the key benchmark for semiconductor stocks - the Philadelphia Stock Exchange's semiconductor index - rose by 2.1% in Thursday trading.
The other big news of the day was Yahoo's announcement that web portal pioneer AOL could get involved in a three-way alliance with Yahoo and Google. Of course, Yahoo didn't come out and say that, but the Associated Press today cites sources high up in the company that say the three companies could combine into one cyber-supernova of a company.
Then, only hours later, Rupert Murdoch's News Corp. said it would pursue a partnering deal with Microsoft for Yahoo, throwing a money wrench in to the Yahoo/Google/AOL proceedings.
"We continue to believe (a Microsoft) deal is the most likely outcome," Citi analyst Mark Mahaney said in a memo today. Mahaney also said that adding that any News Corp/Microsoft takeover of Yahoo would be priced higher than the initial $31-per-share bid from Microsoft in February.
Yahoo sources told the AP that the company "is nearing a deal with Time Warner to fold AOL, excluding its legacy dial-up Internet access operations, into a combined company, sources familiar with the talks told Reuters. Such a deal would value AOL at $10 billion and Yahoo would get cash from Time Warner in exchange for 20 percent of the combined Yahoo-AOL."
Rumors are rampant over what Yahoo would do with the AOL money. The Wall Street Journal reported today that "Yahoo would use the cash and other funds to buy back several billion dollars worth of Yahoo stock at a price somewhere in the middle of the range between $30 and $40 a share."
But the AOL deal might be a tough sell to Yahoo shareholders. Analysts seem convinced that the deal in their best interests.
"In our view Yahoo management would have a difficult time convincing a majority of its shareholders this deal is worth more than Microsoft's offer," UBS analyst Heather Bellini wrote in a report. "Even if shares were repurchased at $35-plus a share, the shares likely would pull back once the buyback is done."
So far, the principles aren't really talking. From all accounts, we should know a lot more in the next two weeks.