Liquidity for the U.S. technology sector is generally very solid due to high cash balances and strong free cash flow, which provide a cushion to withstand ongoing credit market volatility, according to Fitch Ratings.

Among U.S. industrial sectors, the technology industry has one of the highest cash balances.

Although some negative cyclical trends are present, the technology industry overall is expected to continue to achieve growth in excess of U.S. gross domestic product, with many companies benefiting from strong international growth amplified by the weak U.S. dollar, high profit margins and the recurring nature of certain revenue streams. There are concerns for a few companies with significant amounts of debt and/or operating challenges. However, Fitch does not expect any defaults in the near-term as most of these challenged companies do not have any material maturities coming due until after 2010.