Join Kevin Mitnick - the "most wanted computer criminal in the world" - as he shares his secrets on the security threats facing corporate America.

Welcome Guest. | Log In| Register | Membership Benefits
  • Email this page E-mail this page
  • |  Print Print this page
  • |   Bookmark and Share
  • |  icon
  • | 

Reprieve For Tech Stocks


By Eric Chabrow and Eileen Colkin
InformationWeek
July 29, 2002 12:00 AM (From the July 29, 2002 issue)

Technology stocks took a beating over the past two years, but their long-term plummet may have saved them from falling even harder than the overall market in the last few weeks.

The tech sector fell harder, faster, and earlier than other markets in 2001 and saw a slight rebound after Sept. 11 when the rest of the markets began to decline, says Jakob Holm, a portfolio manager with asset financial manager Bay Isle Financial. Because they took early hits, tech stocks didn't nose-dive in the past few weeks as much as stocks in the Standard & Poor's 500 did. Instead, they continued a more gradual decline. "Most people who don't want to have technology stocks sold them already," Holm says.

Techonomics ChartGoing back to January, the InformationWeek 100 tech-stock index has been on a much steeper decline than in the past few weeks, plunging 47%, compared with the S&P's 29% falloff. The tech-laden Nasdaq dropped 25% since Sept. 11 while Dow Jones industrials fell 20%. A rebound isn't likely in the near future, because tech stocks are still relatively expensive, Holm says. "Earnings continue to be poor, and there's not a lot of good news."

But Clare Zempel, chief investment strategist and chief economist at stock broker Robert W. Baird & Co., sees tech vendors outperforming others as the economy rebounds. When companies begin to pump profits back into their businesses, they'll increase capital spending, especially for equipment, Zempel says. Equipment equates to IT at many companies.

Not all companies will rebound at the same pace. Vendors with broad offerings will outperform those with limited wares, IT economist Bruce Kratofil says. A look at the InformationWeek 100 this year reveals that the stocks of multiproduct vendors--though down considerably--outperformed those with limited product lines. Share prices of enterprise computer system and infrastructure app vendors declined 36%, on average, whereas E-business software vendors plunged 64%, and client-server and workgroup software providers plummeted 55%.


Subscribe to RSS


Advertisement

CAREER CENTER
Ready to take that job and shove it?



TechCareers

SEARCH
Function:

Keyword(s):

State:
SPONSOR
RECENT JOB POSTINGS
CAREER NEWS
10 Search Engines You Don't Know About
Go beyond Google and get vertical. These specialized search sites will help you find the business information you need -- fast.

Yahoo Profits Fall 23%, Cuts 1,000 Jobs
Ari Balogh was named to the post of chief technology officer as the companys for a "realignment" of employees.

More articles from our career center





Subscription Info
Apply for a free 52-week subscription to InformationWeek (a $199 value)

Last Name:

First Name:

Title:

Company Name:

City:

Business Address:

Zip:

State:

Email Address:

NOTE: Offer valid for U.S., U.S. possessions, & Canada only