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Market watch

Thursday February 15, 2001

NEW YORK — Investors regaining some of their confidence in high-tech stocks bid the sector higher Wednesday while lessening their reliance on safer blue chips. The result was a mixed session on Wall Street. 

Analysts said investors were still unsettled by congressional testimony Tuesday from Federal Reserve Chairman Alan Greenspan, who indicated interest rate cuts will be less aggressive than the market wanted. But one potentially positive sign in Wednesday’s dealings was the fact that blue chips slipped while tech stocks advanced. 

Wednesday’s movement could indicate that investors are more comfortable committing to riskier high-tech issues, believing that the economy will improve sooner rather than later. 

“The Nasdaq is trying to make a bottom,” said Peter Canelo, U.S. investment strategist at Morgan Stanley Dean Witter. 

However, it’s also possible investors won’t continue for long to favor tech over safer, so-called defensive sectors like drug and consumer stocks. The market has been alternating between riskier and safer stocks since late last year. 

“You are seeing this continuous interplay between the defensive and aggressive sectors,” Canelo said. 

Investors are weaving in and out of the Dow and Nasdaq for two key reasons, said Gregory Nie, technical analyst at First Union Securities.  

First, Wall Street isn’t ready to push the Dow past the psychologically significant 11,000 mark. Second, investors also aren’t sure when the economy will show enough improvement to justify riskier purchases in the tech sector. But because recent selloffs haven’t been major in either sector, Nie sees reason to hope the market will rally in a few weeks. 

“The market seems to be working on a higher lower than in January. And, if we are able to maintain that, that could be an important factor in a spring rally,” Nie said. 

The tech sector, which so far has suffered the weakest earnings in the slowing economy, was mostly higher Wednesday.  


— The Associated Press 





The tech advance could be seen among the Dow’s tech components – IBM rose $1.35 to $115.10 and Intel climbed $1.69 to $34.13. 

Among blue chips, Johnson & Johnson fell $1.25 to $95.65, and Procter & Gamble slipped 86 cents to $73.69. Both are Dow components. 

The retailing sector was mixed despite a government report Tuesday that consumer spending rose more strongly than expected in January. Home Depot ended down 59 cents at $45.72, but Federated Department Stores advanced 59 cents to finish at $44.81. 

Advancing issues matched decliners on the New York Stock Exchange, where consolidated volume came to 1.36 billion shares, up from 1.27 billion on Tuesday. 

The Russell 2000 index, which tracks the performance of smaller company stocks, inched up 0.92 to 503.49. 


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