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The market wants a new drug.

Special G -- a healthy dose of

Alan Greenspan -- just doesn't seem to be working anymore. Now that investors have gotten used to the idea that the

Federal Reserve is back on the market's side again, traders are looking for another reason to push stocks higher.

Tuesday's Coverage

Getting a Handle on the Wireless-Handset Slowdown


Why This Earnings Season Has Been So Brutal

Earnings Burned Investors, but the Tech Fire Remains

With No Catalyst, Stocks Rumbling and Stumbling Through February

In the last week-and-a-half, they haven't found one. With earnings season about done and investors worried about some of the most prominent companies yet to report (like






later this week), market participants have taken to using the term "dead money" to describe growth stocks.

The January rally was founded on the belief that the Fed's aggressive rate cuts would cause a pronounced improvement in economic activity somewhere around six to nine months down the road. These days, they're realizing six to nine months is a long time to wait for growth stocks to grow.

"It's going to be some hard pulling for a while," said Doug Myers, vice president in trading at

IJL Wachovia

. "There's nothing out there to jump-start it, no pending event."

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With apologies to

Walt "Clyde" Frazier, a combination of rotation and hesitation is facing the market for the next several weeks, without a significant catalyst to cause a rebound in the growth sectors.

Technology stocks, with the exception of a few sectors, have gotten slammed in recent weeks based on the growing realization that software, networking and fiber-optic names are dealing with a slowing in capital spending and a draw down in inventories.

When capital spending rebounds is unclear -- but it doesn't appear to be on the horizon yet. The tech-led rally of January was a reaction to the Fed, rather than a reflection of improvements in company fundamentals. For a while, the market got some mileage from reports that financial activity, such as bank loans, debt offerings and mortgage activity, was showing improvement. While that could help the market's tone in coming months, it's a pretty esoteric factor to hang one's rally hat on.


Rotation and wild swings have been frequent recently. But, in the last few weeks, investors' desire for defensive stocks has grown as tech stocks have lagged.

"The rotation between tech and the Dow has taken place, and that's where the smart money was going," said Phil Ruffat, senior vice president/manager at

Fuji Futures

. "After a rally, they would rotate out of the

Nasdaq into

Dow-type stocks and

S&P-type stocks, like a one-, two- or three-day thing."

Another inhibiting factor is the volatility. Near the end of January an equity manager could have torn out his or her hair, screaming because they'd missed a 16% rally in the Nasdaq.

Ed Laux, head trader at

ABN Amro

, however, doesn't necessarily see the volatility as a detriment. He believes, unlike last year when the panic was widespread, that there's been a prudent shuffling of money from sector to sector so far during 2001. It's not coming back to tech en masse yet, but that doesn't mean it won't ever.

"More people are coming to the greater realization that

tech is going to be dead money for a while, but big money managers aren't ready to pull money from the market given historical reactions to a lower rate environment. There are other things that can be beneficiaries earlier."