Most Sectors Slide, but Gold and Silver Shine

Tech Survey

The Philadelphia Stock Exchange Semiconductor Index rocketed 45% in the eight-week period following the October low, despite no apparent fundamental change. Even though it's given back about half those gains in the past two weeks, valuations remain healthy. For example, Intel (INTC) is trading at 47 times earnings, and KLA-Tencor (KLAC) is sporting a price-to-earnings ratio of 42.

Even the beaten-down wireless sector enjoyed a year-end rally on hope of renewed demand. Shares of AT&T Wireless (AWE), at $6.85, are still down 54% for the year, but have doubled from their recent $3.20 low.

Three leaders of the Internet revolution turned in nice performances. Amazon.com (AMZN) shares have gained 100% to $22 for the year to date. Yahoo! (YHOO), while down 3.5% for the year, has also doubled from its low of $9. eBay (EBAY) has eked out a 4% gain for the year to date. Another of the Internet's household names, AOL Time Warner (AOL), wasn't as fortunate and has lost 60% for the year to date.

Price Pressure Could Reduce ISPs to Tiers

Big Software Aims Small in 2003

Most Sectors Slide, but Gold and Silver Shine

Five Stocks Shine in Dreary Year

Networking: Next Year: Cisco, Juniper and Red Ink

Cisco Shift Gums Up the Works for Rivals

Homeland Security: Firms Scramble to Cash In

Wireless: Pinning Hopes on Shutterbugs

Consumer Debt: Looks Set to Keep Soaring

Old Economy Warriors

Retail sales have become sporadic, with market leaders, such as Wal-Mart (WMT) and Target (TGT), offering lackluster sales figures going into the latter part of the holiday season. For the year, these two stocks are down 13% and 28%, respectively.

Homebuilders have held some nice gains after a series of strong months. Lennar (LEN) is up 13% on the year and holding on to three-year gains of 224%. A backlog of orders and continuing faith in home ownership may keep the wind at the back of these stocks over the next year.

As we head into these final days of 2002, one bright spot is that people are actually making a solid case for the worst being over (in some quarters at least). Of course, last Jan. 1 many people thought a third straight down year for the major averages was an improbable scenario. Whether the market will have a fourth is speculation at this point, but winners will emerge. You just might have to look a little harder.

>To order reprints of this article, click here: Reprints