[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Tuesday, 24 May, 2005, 06:03 GMT 07:03 UK
Google and Apple lift tech shares
Nasdaq headquarters in New York
Are tech stock climbing back to their previous heady heights?
Google shares jumped 5.7% to a record on Monday amid speculation that the internet search engine will be added to the key Standard & Poor's 500 index.

Google shares surged to $255.45, taking gains over the past week to 11%.

Inclusion in the S&P 500 pushes stocks higher because many investors are only allowed to put money into companies that are listed in the biggest indexes.

Apple shares rose 5.9% after the Wall Street Journal reported it is in talks to use Intel chips in its computers.

By putting Intel microprocessors in its computers, Apple would be able to produce cheaper products which could compete better with low-cost rivals such as Dell, analysts said.

Moving on up?

Calls for Google to be included in the S&P have been mounting as internet stocks have recovered and balance sheets have improved.

Technology stocks were the best performers on Wall Street on Monday and investors said that including a heavyweight internet stock like Google would help the S&P benefit from such gains.

Google logo, Google
I wouldn't be surprised if Google, given its size, were to be added to the S&P 500
David Garrity, Caris & Co.

The S&P 500 tracks the biggest companies in the US and members must have a market capitalisation of more than $4bn (2.2bn) and at least 50% of its shares available to be traded.

Share trading must also be liquid, or in other words - easy for investors to buy and sell.

Google, one of the heaviest traded stocks on Wall Street, qualifies on all counts with a market value of almost $71bn and 64% of shares in the market.

"I wouldn't be surprised if Google, given its size, were to be added to the S&P 500," said David Garrity, an analyst at Caris & Co.

Standard & Poor's declined to comment on the rumours.

Core business

Apple's stock jumped closed at $39.76 on Monday, giving the biggest boost to the Nasdaq.

The Wall Street Journal reported that the firm was considering ditching its long-term supplier IBM and start using Intel chips.

Apple Mac Mini
It's like Ferrari going to BMW for an engine
Richard Doherty, Envisioneering,

IBM has had trouble keeping up with demand for processors from Apple, which has seen sales increase on the back of the buzz surrounding its iPod music player.

However, the report, which cited two industry executives with knowledge of talks between the companies, said negotiations could still break down.

Both Intel and Apple declined to comment on the "rumours and speculation."

Analysts said that changing chip suppliers was not an easy process and voiced scepticism.

"It's just too much software to have to change," said Kevin Krewell, editor-in-chief of newsletter Microprocessor Report.

For Richard Doherty, research director for technology consulting and research firm Envisioneering, the change would signal a significant shift in technology industry alliances.

"It's like Ferrari going to BMW for an engine," he said.




RELATED INTERNET LINKS:
The BBC is not responsible for the content of external internet sites


PRODUCTS AND SERVICES

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
UK | Business | Entertainment | Science/Nature | Technology | Health
Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific