Posted on 12/05/2001 10:00:09 AM PST by TPartyType
By Amy Baldwin
AP Business Writer
Wednesday, December 5, 2001; 1:19 PM
NEW YORK –– Technology shares led the stock market higher for a second straight session Wednesday, helping to propel the Dow Jones industrials up by triple digits and into the 10,000 level. The advance also lifted the Nasdaq composite index past 2,000.
Investors bet that the battered sector would trigger a new bull market. Upbeat comments from Cisco Systems and Oracle fed the growing optimism.
Amid heavy trading in early afternoon, the Dow surged 181.50, or 1.8 percent, to 10,075.34, adding to Tuesday's 129-point advance. The Dow has not closed above 10,000 since Sept. 5, when it finished at 10,033.27.
Broader stock indicators also rose sharply. The Nasdaq composite index soared 75.12, or 3.8 percent, to 2,038.22. The tech-focused index hasn't finished above 2,000 since Aug. 7 when it stood at 2,027.29.
The Standard & Poor's 500 index, which is Wall Street's widest measure, gained 21.85, or 1.9 percent, to 1,166.65.
Analysts attributed technology's strong run to buying by professional money managers looking to improve yearly performance. Historically, analysts said, the sector fares best in the fourth quarter.
"We are coming to the end of the year, and portfolio managers are reaching for performance. And tech stocks have done the best this quarter," said Richard Dickson, technical analyst for Hilliard Lyons in Louisville, Ky.
Technology has made the biggest strides since the Sept. 11 terror attacks. Through Tuesday's session, the Nasdaq has risen nearly 38 percent from its post-attack low of 1,423.19 on Sept. 21. The Dow has moved up 20.1 percent from its low; the S&P, up 18.5 percent.
Wall Street is also increasingly optimistic about an economic recovery occurring next year, and investors don't want to miss out on the market's next upturn, analysts said.
"You are getting momentum going. And, momentum begets momentum," Dickson said. . . .
Maybe, but not for the reasons that you might think. Everyone I speak to in the tech sector tells me that they are busier now than they've been since 1999, so the rationale behind my forecast is dead-on.
One thing is for certain, though -- stock prices in almost every sector are down for two reasons: 1) corporate earnings are down (i.e., even "busy" companies and sectors aren't generating large profits on their sales), and even companies with good earnings have to contend with stockholders who are rightly skeptical about the integrity of their accounting practices.
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