Tech stocks power rally on Wall Street

  • Thursday, November 29, 2001 9:00pm
  • Business

Associated Press

NEW YORK — Technology stocks, expected to pull the market higher as the economy recovers, showed some of that promise Thursday, rising solidly and helping Wall Street end two days of profit taking.

"The market is looking for leadership. Ultimately, that leadership will come from technology," said Ronald Hill, investment strategist at Brown Brothers Harriman &Co.

The Dow Jones industrial average closed up 117.56, or 0.2 percent, at 9,829.42, having lost 270 points in the previous two sessions when investors cashed in recent profits. The Dow is 19.3 percent above its low of 8,235.81, where it closed Sept. 21 following the terror attacks.

Among the Dow’s biggest gainers Thursday were its tech components, with IBM gaining $2.28 to $114.43, Microsoft rising $2.04 to $64.84 and Hewlett-Packard rising $1.23 to $21.40.

"People are becoming more comfortable that the economic downturn is behind us. The stock market is forward looking, and … the notion is that we have a bottom in place, that we have made our lows," said Brian Belski, fundamental market strategist for US Bancorp Piper Jaffray.

Analysts said investors need to keep hearing such positive reports to soothe lingering concerns about excessive inventories and consumer spending, which accounts for two-thirds of the nation’s economy.

Analysts said that although companies haven’t been particularly positive about the future, their prospects have at least been less bleak, and that has enticed investors to buy stocks.

"The magnitude of the negativity is beginning to lessen, and that is the key thing. You have to walk before you can run in terms of growth," Belski said. "We can’t go from deeply negative to all of a sudden really positive."

The fact that technology claimed much of Thursday’s advance was an encouraging sign to investors looking for the battered sector to lead the market higher.

"The next big story will be the turnaround in industrial production. Once that turns around, industries, technology and other cyclically sensitive stocks will turn around," Hill said.

Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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