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Time for a Tech Turnaround

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If a bearish cover on

Newsweek

is glad tidings for the stock market, surely the pillorying of

Foster Friess

in column six of yesterday morning's

Wall Street Journal

is confirmation of the turn in the technology sector. As the chart below indicates, technology earnings now seem to be rebounding from a nine-month slump.

On a cap-weighted basis, the technology sector is still expensive, reflecting the relative strength this year in larger-capitalization names such as

Microsoft

(MSFT)

,

Intel

(INTC)

and

Dell

(DELL)

. The table below shows bottom-up, share-weighted valuation and growth statistics for the 16 economic sectors we track closely, ranked by earnings-estimate growth over the past six months.

Economic Sectors -- Ranked by Six-Month EPS Growth

The best opportunities in the sector seem to be found in the battered semiconductor and equipment area, with companies such as

Advanced Micro Devices

(AMD)

entering autumn with new product cycles and strengthening demand from end customers. As can be seen in the chart below, Advanced Micro's price remains near its two-year low while the earnings estimates have already begun to trend back up.

Ted Murphy (

ted@pdgm.com) operates the

MarketPlayer Web site. Previously he was a partner at Equinox Capital Management. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks.