Technology exchange traded funds were the worst performing sector ETFs Monday with a 1% loss as investors awaited quarterly results from Dell (NasdaqGS: DELL).
Tech-sector ETFs have been weak lately with Nvidia (NasdaqGS: NVDA) feeling the heat following disappointing quarterly earnings last week. [Nvidia Pulls Down Semiconductor ETFs.]
Dell is expected to announce first-quarter earnings Tuesday. Analysts are looking for profit of 43 cents a share. The stock was down 2% on Monday while Technology Select Sector SPDR Fund (NYSEArca: XLK) slipped about 2%.
BMO Capital Markets predicts Dell results will show a strong quarter and that gross margins will be roughly flat quarter over quarter, leading to upside in earnings per share versus consensus.
“Over the past three months, Dell’s stock has increased by 20% compared with approximately 3% for the Nasdaq, meaning that at least a portion of our projected strong gross/operating margin performance is in the stock,” the analysts wrote in a note. BMO Capital Markets has a target price of $18 on Dell shares.
ETFs such as Internet Architecture HOLDRs (NYSE: IAH) could get the boost they need from a positive earnings report from Dell. The ETF holds more than 5% in the company. [Yahoo Decline Hits Internet ETFs.]
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.