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Are PC Sales Really Hitting The Bottom?

Intel: are PC sales really bottoming? After the close intel reported earnings that beat expectations, and while they gave cautious revenue guidance trading desks are focused on Otellini's comment that PC sales had bottomed out in the first quarter.

Bullish traders are trying to combine these comments with Seagate's upbeat guidance on Monday as signs that a bottoming trend in tech is developing.

On Intel, Stiefel Nicolaus said, "the firm is a proxy for the bottoming process that is likely occurring across most consumer and enterprise markets."

Whether this process has more to do with depleting inventories, or is really an increase in sales, is not clear, as Stiefel and others concede.

Intel is trading down, and little wonder: with the stock up 30 percent in the past month, it could easily succumb to the sell on the news mentality that afflicted Goldman yesterday, and may likely affect other big performers as earnings come out.

We have seen the same hope for retailers, but retail sales and Talbots awful numbers yesterday is a real dash of reality. It's safe to say that consumer spending is improving from the super-trough in the fourth quarter, but there is not yet a dramatic sign of improvement.

Tax refunds and other parts of the stimulus package are a positive, but most doubt that it will materially move the needle.

This is the "fits and starts" theory which is becoming more of the consensus every day. On NBC's Today Show this morning, Wal-Mart's CEO Mike Duke warned that he does not expect a quick end to the current recession.

Noting that "there's still a lot of stress" in the economy, he cautions that we're not in a "V recession, where we're just going to bounce out and come back."

Elsewhere:

1) There will be talk of deflation again because March CPI fell by 0.1 percent, but don't kid yourself: gasoline prices, along with most commodity prices, bottomed in February.

2) Freight company CSX is up 7 percent after handily beating estimates by 11 cents. Despite a 17% drop in revenues due to weak demand and declining volumes, CSX still beat the street's forecasts after efficient cost management

3) Credit card issuer Capital One Financial is down 8% pre-open as it revealed rising credit card defaults. It noted that its net charge-off rate rose to 9.33% last month - up from 8.06% in February.

4) Brokerage firm Raymond James Financial is plunging 15% pre-open after warning that its Q2 earnings will be "well below" analysts' estimates. It expects its banking operations will lose $8 million in the latest quarter, amid additional loan loss provisions and writedowns.

5) Online auction house eBay up 3 percent after it said it plans to spin off its Internet telephone service Skype in an IPO next year. This comes after eBay purchased Skype for $2.6 billion about 4 years ago.

6) Applications to purchase a home dipped slightly last week after rising five consecutive weeks, but remember last week was a holiday...mortgage rates, at 4.70 percent for a 30-year fixed rate mortgage, remained near record lows, according to the Mortgage Bankers Association.

7) Bullish sentiment is rising, according to Investors Intelligence: 43.2 percent of investor newsletter writers are bullish, the highest levels since last June, up from 36 percent last week...bearish sentiment has been high for some time now.

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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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