Wall Street Beat: Clouds loom for IT despite holiday break


But industry analysts are cutting forecasts to reflect declines in certain sectors.

"We expect sales in 2009 to show a low single-digit growth contraction" from 2008 levels, said Gartner analyst Carolina Milanesi in a report on mobile-phone sales this week. A slump in mobile upgrades could have wide impact on IT, since mobile device usage has been a big driver for growth in tech overall.

Online commerce, another sector that helps bolster technology, is apparently floundering. This week, comScore forecast U.S. online retail spending to be essentially flat during the last two months of the year -- the important holiday sales season -- compared with 2007. U.S. online retail spending rose 9 percent through October, but spending so far this month dropped 4 percent.

Reflecting a worsening macro environment, Citigroup this week cut its forecast for the semiconductor sector. Citigroup now forecasts 2009 revenue and earnings per share to decline by 9.5 percent and 12.8 percent, respectively. "Our cuts reflect poor end demand, inventory reductions and an absence of credit in the supply chain that conspired to make October particularly difficult for chipmakers," wrote analyst Glen Yeung. Citigroup cut estimates for nine chip makers including AMD, Nvidia and Qualcomm.

Unemployment and tight credit, a result of the housing market crisis and subsequent collapse of the Wall Street investment banks, has curbed consumer and business spending across all sectors of the economy, including tech.