Rate Cut Spurs Tech, but Has the Economic Horse Left the Barn?

It's the sort of counter-intuition that could come back to haunt investors very soon. Tech stocks put together one of their biggest and broadest rallies ever after the Federal Reserve's emergency rate cut confirmed Wall Street's worst fear, that the longest-running economic expansion in U.S. history may be nearing its end.

No stocks have reacted more hotly to the Fed move than those in the Internet infrastructure sector. In recent months, fears of a slowdown in information-technology spending by big corporations have taken stocks like JNI (JNIC Quote), Emulex (EMLX Quote) and Network Appliance (NTAP Quote) well off their highs. But the Fed move had those same stocks rocketing more than 20% higher -- like nearly every other infrastructure stock.

At least for one afternoon, investors are showing remarkable confidence that Fed boss Alan Greenspan is doing what it takes to engineer a so-called "soft landing" for the economy. But some remain cautious in the midst of this ebullience. ...