Investors have been wondering what would happen to the rest of the market if the Dow fell and stayed below the 10,000 level. Well, technology held up relatively well today despite the Dow ending at 9862.12, on thoughts that money flowing out of the blue-chips will land in the Nasdaq. Internet stocks were mixed to end the week, as traders remained uncertain about market direction. TheStreet.com Internet Sector index closed down 8.45, or 0.7%, at 1176.11.
Dick Dickson, technical analyst with
Scott & Stringfellow
, said he thinks technology will eventually be dragged down by the broader market. And while he said he wouldn't be surprised if that happened Monday, his best guess would be that it happens sometime in the second quarter.
"You're not going to see the Dow bottom out, then rally like crazy and close the gap with tech stocks," he said. "That has never happened in the past. What has happened in the past is that the highfliers eventually will go down and meet those that have been crushed."
Dickson said he did not know what the catalyst would be, but he said supply could play a role. With the flood of technology IPOs hitting the market, if IPOs start to show poor performance, it could be an indication of trouble elsewhere, he said.
"The market has a herd mentality. And right now the herd more or less is heading toward the techs and away from blue-chips, but that could easily shift. Then you have people who want to take profits, and it can snowball very easily," he said
Among the top performers was
, which closed up 34 1/16, or 19%, at 213 1/16 after the Big Three automakers
said they would form an online business that will combine their purchasing networks for auto supplies. The exchange will be powered by Commerce One and
, and both are expected to have equity in the venture.
The news had an impact on some other
closed down 25 7/8, or 15%, at 150 5/16. Also,
closed down 18 1/16, or 9%, at 192.
Among the other gainers,
closed up 22 3/4, or 14%, at 187.
Banc of America Securities
initiated coverage of the Internet customer management software company with a buy rating and a price target of 220. Also,
closed up 9 7/8, or 12%, at 91 13/16 after
Salomon Smith Barney
raised its revenue estimates and price target on the Internet advertising firm. And
closed up 2 11/16, or 7%, at 41 11/16 after
U.S. Bancorp Piper Jaffray
initiated coverage of the stock with a strong buy rating and a price target of 94.
But a number of stocks that have rallied of late took hits today.
, which was up more than 30 points yesterday, closed down 23 7/16, or 7%, at 308 3/4.
slid 13 3/16, or 8%, at 150 13/16 after gaining around 30 points the past two sessions.
Internet Capital Group
closed down 12, or 10%, at 107 1/8. Investors latched onto a comment the company made last night that it sees losses in many quarters for the foreseeable future.