Intel rallies stocks and saves economy for now

Intel’s latest quarterly result has proven proven to be a shot in the
arm for stocks. Bouyed by an uptick in chip orders, the rest of the market got happy
feet and stock prices rose across the board. It’s a welcome respite
from the pounding of the Great Depression 2.0. Not everyone sees the
silver lining, and some analysts just don’t buy the feel good factor.

According to Bloomberg, all the major stock indices rose on the back of Intel’s announcement and its statement that “computer makers boosted chip orders in anticipation of stronger demand.” Investors were optimistic that computer demand may signal a change for the better in consumer demand. Intel CEO, Paul Ottelini, said that second quarter growth was the best for Intel since 1988.

Antone Gonsalves at Information Week sounds a note of caution in this article here pointing out that Dell had indicated that its data shows demand to be stabilized, but growth was still small. Meanwhile, some analysts are saying that Intel’s performance hints more at a clearing of inventory backlogs than a true uptick in demand.

Is the worst over? There’s not much to feel good about or dig a ditch to jump into, either way. No one knows anything. Maybe we are all looking for a flicker of light in the darkness. The PC business has always been a bellweather for business demand, but neither Intel nor Dell indicated any real movement among business buyers. Consumer demand is also likely to take a hit if unemployment continues to get worse. So, we’re left wondering if Intel isn’t just trying to put a happy face on things, and making the best of a bad situation.

Over at The Street, they’re saying Don’t Buy the Intel Rally. Maybe they have it right.