SAN FRANCISCO -- Today's deal between
has led to a feel-good rally in the stock market but may not suggest the tech sector is back on an upward path.
Gains in IBM following news of its deal with Dell have accounted for roughly 20% of the Dow's rise today, a substantial figure.
And gains in the
are being fueled by strength in a few of the subsectors, but it has not been a broad-based rally.
Chip makers are doing well following an upgrade of both
to strong buy from buy. Analyst Mona Eraiba noted that recent declines in the stocks presented "excellent buying opportunities" and anxiety over the personal computer market is blown out of proportion.
Intel was up 7/16 at 117 5/8, though it had slipped from a session high of 117 5/8, while Micron Technology was up 2 3/16 or 4% at 54 13/16.
Also benefiting was
, which is up 3 3/8 or 3.7% at 95 1/4. The company said today that it expects "modest revenue growth in its semiconductor business" due primarily to strength in wireless and the mass market.
And shares of
have rallied after
reiterated a strong buy rating on the company and set a $135 price target. Cisco was trading 2 3/4 higher or 3% at 97 7/8.
Dick Dickson, technical analyst with
Scott and Stringfellow
, is not convinced that today's gains suggest the tech stocks are back in rally mode. Dickson said traders at Scott and Stringfellow were telling him that the recovery was being fueled by short-covering, not exactly the best sign of a change in sentiment.
Dickson said he would be "very surprised" to see tech stocks revisit highs made last month and does not anticipate a follow-through from today's trade. He said stronger stocks, such as Cisco,
may trade sideways rather than move lower as part of their correction.
Internet stocks have not gone along for the ride higher today, though
remains a notable exception.
EBay was trading at 127 5/8 today, up another 4 1/8. The stock split 3-for-1 on Monday so its high of 130 today is equivalent to 390 pre-split.