Tech stocks go ga-ga
It's Monday again but this time around, it's nothing but good news for the market as a whole and technology stocks in particular.
In early-afternoon trading, the Dow Jones Industrial Average surged up 154.96 points to 7597.04 while the NASDAQ rose 25.84 points to 1619.45.
Just a week removed from the single largest one-day loss in market history, investors on Monday resumed trading with momentum established Friday and a renewed sense of confidence in the global economy.
"Anyone who says they know why the market's up today is lying," said Jim Poyner, an analyst at Oppenheimer $ Co. "Part of it is due to what happened in Asia and part of it is people realize these blue-chip tech stocks are solid and will be through the fourth quarter. There's also an element of American pride, too."
Remember, it was the plunging stock markets in Asia and Latin America that played a central role in last week's 554-point loss. And if only briefly, American investors found themselves in the unusual role of reacting to foreign markets rather than dictating to them.
"Some people decided they weren't scared of the foreign markets, at least not enough to change their investment strategies," Poyner said. "They're saying that although the markets are off abroad, the fundamentals of these stocks, your Dells, Compaqs, and Microsofts, haven't changed to the point that justifies last week's sell-off."
Fast forwarding to Monday, Hong Kong's Hang Seng index rose 5.9 percent overnight. In essence, the Hong Kong market caught a dose of optimism originating from Wall Street on Friday as the Dow gained 60.41 points to 7442.08 while the NASDAQ surged up 23.18 points to 1593.49.
Virtually every segment of technology stocks provided evidence of a rebound.
Among PC makers, Dell Computer Corp. was up $1.56 per share to $81.69. Compaq Computer Corp. rose $1.81 per share to $65.81 while Gateway 2000 Inc. and IBM were up 19 cents and $1.81 per share, respectively.
The so-called new media stocks, which took a tremendous drop in last week's meltdown, made a robust recovery. E*Trade Group Inc., which came under fire for delays in online stock transactions during the slide, gained $1.50 per share to $32.38. American Online Inc. was up 94 cents per share to $77.93 while Internet search firms Yahoo! Inc. and Excite Inc. were up $1.41 and 69 cents per share, respectively.
Microsoft Corp. was up $2.81 per share to $132.81. Oracle Corp. picked up 16 cents per share to $35.94 and Sun Microsystems Inc. gained $1.75 per share to $36.
In the networking segment, Cisco Systems Inc. improved $1.72 per share to $83.75. 3Com Corp. rose $2 per share to $43.44 and Bay Networks Inc. shot up $1.56 per share to $33.19.
Timing may also be on the side of investors as more than 500 technology firms began pitching their promise to financial analysts at an American Electronics Association conference in San Diego.
"(The conference) will shed some light on what we can expect in the next couple of months," Poyner said. "After all the fretting and near-panic of last week, I expect it will have a positive, calming effect. At least, I hope it does."