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. . . .
Well that cooled my sarcastic jets..;>) Seriously...that's some pretty skookum investing. I wondered if I should invest in some defense stocks. Proabaly couldn't lose....
He does well on broad market trends. The QQQ recommendation was pushing his own boundaries and he was wrong, which he admitted, but he did say it was short term. It will be back some day, but if somebody needs to cash out now they will take the hit. I don't know if the Plunge Protection Team has a new assignment to build general market strength, but somebody is buying.
Actually, the major stock indices are the leading economic indicator.
But this rally is a false dawn.
Techinally, the Dow and Nasdaq both broke thru round number resistance, while the S&P broke out of a nearly 2 year old bull channel on huge, almost blowoff level volume. I don't think it is a blowoff, but a continuation move, I think there was a particularly large of pool of money on the sidelines looking for confirmation to get in. The upper target would now be around 1400 on the S&P.
Well Lockheed Martin (LMT) has had a good year, but everytime the tech stocks rise it seems that Lockheed takes a hit. The problem is that they win these big programs, like Joint Strike Fighter then people realize the money will come over 15 years. Lots of job stability though, LMT is hiring.
dot bomb
Ain't it the truth!
I dabbled with tech IPO's in 1999. Never held a stock over ten minutes (talk about hitting the refresh button) and made a scandalous amount of money. I noticed one strange coincidence and the theory held all year - the companies with the largest percentage of losses performed the best as far as initial pops were concerned. It was indeed bizarre and a warning that the tech sector was not all it seemed to be. I suspect we will never see anything like that again - much to my disappointment. However, as I mentioned yesterday, I still have a funny feeling about ACH. I'm not sure when it will start trading (probably today or tomorrow) but I'll post the results when it does.
No, thankfully!
I have since been politely reminded that this theory has been mainstream since 1Q '01. I believe AB has shared many thoughtful insights to the theory though.
Ken
Technology sector bounce in 02 ?
My company and many others I know are about to spend hundreds of thousands in Dell, EMC, CISCO, etc...
2002 figures to be a banner year for the tech stocks, since all of that stuff that was purchased in 1999 will be due for replacement.
You heard it here first "
Are you ready to revise that?
ahem
Sheesh...
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