Fed on hold; stocks explode
The message of
Tuesday’s market is that technology is far stronger than most could
have imagined just a day ago.
Everyone knew the Fed wouldn’t tighten.
And usually when everyone on Wall Street knows something, it’s not worth
knowing. Tuesday represented a prime opportunity, then, for some nervous nellies
to sell into the news that had long been discounted into share
prices.
The fact that the techs escalated prior
to the Fed’s 2:15 p.m. ET announcement, then spiked higher on the news to go out
at their session highs says a lot. That the market reacted in such a positive way
even as bonds sold down about 22 ticks once the news came out says even
more.
The action was quite constructive among
top-tier techs: Dell [DELL>DELL] advanced for the fifth day in a row…Intel
[INTC>INTC] also rose on a tapering of volume–the heavy turnover of
Wednesday and Friday has put the stock in a good position…3Com [COMS>COMS],
skipping to a new high after a one-week pullback, and Compaq [CPQ>CPQ],
pressed up against the top of a four-week trading range, up 10% on solid volume,
were the stars among the benchmarks.
In color=#008000>cyberspace, Yahoo! [YHOO>YHOO] was a burner,
vaulting another 10%–The stock broke out of an eight-month base on Dec. 2 and
rocketed 52% over the ensuing four sessions, pausing for just a few days before
blasting off anew–it’s a good example of how the best stocks are the hardest to
buy technically…CMGI [CMGI>CMGI] and DoubleClick [DCLK>DCLK] gapped
higher on big volume.
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Affymetrix [AFFX>AFFX] followed
through nicely on its Monday breakout as volume swelled to more than triple its
norm.
