Tech Stocks Offer Security Banks Can't
SAN FRANCISCO -- The ironic thing about Tuesday's Citigroup (C)-inspired market rally is that it merely preserved the continued outperformance of tech stocks.
While Dow-watchers were enjoying their 379-point run-up, neither that index nor the S&P 500 could boast the jump of more than 7% posted by the Nasdaq.
That gap was in similar effect on Wednesday, with the Nasdaq recently up 1.6% to the S&P's 1.2% climb and the Dow's 0.8% rise.
Over the past three months, the Nasdaq is now down by only 9% or so, while the Dow and S&P have fallen nearly 20%, even after Tuesday's jump.Several reasons exist for this, with the main one supporting the notion that said outperformance will continue: Most tech stocks will be here, in their current form, without government assistance, a year from now. A skim of the Nasdaq's most-active list on Tuesday offers you Microsoft (MSFT), Intel (INTC), Cisco (CSCO), Oracle (ORCL) and Apple (AAPL). All of these companies have their own share of challenges in 2009, but we're all fairly certain that each stock will rise again when the global economic engine starts revving again. And what does a New York Stock Exchange list look like today? It gives you the giants of finance -- Citigroup, Bank of America (BAC) and General Electric (GE) -- as day-trading favorites. This is the market's equivalent of playing in a basketball conference with too many weak teams. The Big East gets 7 bids, the Mid-American Conference champ gets a date with UConn in the first round.
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