- The Washington Times - Friday, October 5, 2001

NEW YORK (AP) Investors newly enthusiastic about tech stocks extended the sector's rally yesterday after Dell Computer became the second big high-tech firm in as many days to issue a positive earnings outlook. Blue-chip stocks had a modest retreat.

Dell's news, added to a similar forecast from Cisco Systems on Wednesday, bolstered investors' confidence that the economy will rebound after last month's terrorist attacks.

While the market finished well off its highs of the day as profit-taking set in, Wall Street maintained the positive tone that has defined much of this week's trading.

The focus on tech stocks hurt the Dow Jones Industrial Average, which fell 62.90 to 9,060.88 after having been up as much as 63 points. But the Dow's loss was small compared with the 173 points it gained Wednesday to close above the 9,000 level for the first time since the Sept. 11 attacks.

The blue chips have regained 825 points, or 60 percent, of the 1,369 they lost in the first week of trading after the assaults on the World Trade Center and Pentagon.

Meanwhile, the broader market was mixed yesterday. The Nasdaq Composite Index rose 16.50 to 1,597.31 after advancing 88 points Wednesday, its biggest daily point gain since the attacks. The tech-dominated index was up as much as 60 points yesterday before giving back some ground.

The Standard & Poor's 500 index slipped 2.66 to 1,069.62.

Analysts said the tech advance wasn't surprising given the overall market's losses after the attacks. But they don't expect the market to move much higher for the remainder of the year, or until it's clearer when the economy will recover and how the United States will retaliate.

"This rally is basically about getting you back to where you should be so long as nothing else terrible happens," said Charles Pradilla, chief investment strategist for SG Cowen Securities.

Among yesterday's winners were the two tech bellwethers that affirmed their earnings estimates. Dell rose $1.68, or 8 percent, to $22.32, while Cisco advanced 47 cents to $14.42.

Wall Street has rarely seen such positive outlooks even before the attacks, having had to grapple instead with profit warnings and layoff announcements. The market was especially encouraged that the upbeat news came from the tech sector, which has been hit the hardest by the slowing economy.

The Dow's winners were mostly technology stocks as IBM rose 36 cents to $97.31.

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