Magazine article American Banker

Profit-Taking Leaves Tech Stocks Mixed

Magazine article American Banker

Profit-Taking Leaves Tech Stocks Mixed

Article excerpt

Bank technology stocks were mixed for the week, as investors continued to sell technology company shares with high valuations.

Sources said a profit-taking atmosphere has set in among bank services firms and is responsible for the prolonged erosion of stock prices for companies such as Computer Sciences Corp., Electronic Data Systems Corp., and Transaction Systems Architects Inc.

Transaction Systems' stock price dropped $6.25 during the week on no discernible news and closed Friday at $26.625. Its stock has lost more than 40% of its value in the last three months.

During the same period, Electronic Data Systems' stock price has lost about 27% of its value, while Computer Sciences' stock has lost more than 14%.

For the week, Electronic Data Systems shares were down another 12.5 cents, to $46.25, while Computer Sciences was off $1.25, closing Friday at $70.75.

In the broader market, investors reacted with surprising ebullience to Friday's Commerce Department report that said the economy grew at a faster than-expected 4.7% annual clip in the fourth quarter.

Instead of treading cautiously in anticipation of an interest rate hike, many investors increased their trading activity, perhaps buoyed by the apparent lack of inflation in the economy, observers said.

The Nasdaq composite, where many technology firms are traded, rose more than 16 points for the week, to 1,379.84. The Dow Jones industrial average also rose, by 116.61 points, to 6,813.09.

Goldman, Sachs & Co.'s index of U.S.-traded technology firms, which lists many bank vendors, rose 3. …

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