John J. Edwards III chatted on AOL MarketTalk on Monday, March 20. AOL's MarketTalk is hosted by Sage Online (Keyword: PF Live).

OnlineHost:

Live from New York, N.Y., please welcome John Edwards, assistant managing editor, TheStreet.com. John can answer questions about the latest market-moving news.

OnlineHost:

John does NOT offer individual stock commentaries or recommendations.

SageMoola:

Good afternoon and welcome to MarketTalk, Mr. Edwards!

Jedwards:

Thanks for having me. Great to be here! Coming to you from SF this week, by the way.

Question:

Why have some companies moved from the Nasdaq to the Dow?

Jedwards:

Not sure if you meant to say the NYSE, or you're wondering about the Nasdaq stocks now in the Dow. So I'll take both. Companies usually move to the NYSE largely because of the NYSE's greater prestige and international profile, although the Nasdaq has come a long way and recently even lured a company the other way.

Jedwards:

Some companies also prefer the NYSE's floor-based specialist system to the Nasdaq's market-maker system. As for the Dow, it recently added Nasdaq stocks Microsoft and Intel, along with SBC and Home Depot, in an effort to better-reflect today's economy. Contrary to what some have thought, Nasdaq stocks have never been barred from the Dow, but Dow Jones has been reluctant to add them.

Question:

Drug stocks are taking a beating. Time to get in?

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Jedwards:

Always a tough sector. There's definitely some value there, especially given that big pharmaceutical companies are going to benefit from a lot of the research that has made biotechs so hot until recently.

Jedwards:

But drug companies are facing significant challenges, such as patent expiration and the maturity of the market for major drugs. And it's hard to bring a beaten-down sector quickly back into favor. I would suggest dabbling more than jumping in with both feet.

Question:

What do you see for the future of Web site and application-hosting companies?

Jedwards:

There will probably be more consolidation in those areas, but the survivors could well be worth owning. In general, it's important to carefully assess the real financial health and market position of hot Internet-related stocks. Don't be swayed by hype; they'll all be treated like real companies sooner or later (probably sooner), and will be expected to show real earnings and real growth.

Question:

Is it a good idea to get out of Nasdaq?

Jedwards:

As with all questions that broad, it very much depends on your personal situation and your investment goals. Overall, again, I would counsel more of a company-by-company look. Unless you're playing QQQ shares, the Nasdaq 100 trust on the Amex, it's hard to get out of "Nasdaq" in general without getting out of specific stocks.

Jedwards:

You have to assess whether the stocks you own have real prospects that aren't being sufficiently recognized, or if they've run up on hot air. If you have solid, proven stocks that are getting knocked around, it might be worth holding tight or even buying more. If you've got profits to take in speculative issues, you might want to go ahead and take them.

SageMoola:

Thank you very much for joining us today, Mr. Edwards!

Jedwards:

Sorry to wax long-winded there! Thanks for chatting, and I'll see you at TheStreet.com!