Last week, Santa decided to visit the Nasdaq, and some investors may
wonder if he'd been around all year. The first session of the week ended with
the Nasdaq Composite Index closing above the 2000 mark for the first time in
nearly two years. "There is a general view that we've got improving
fundamentals, an improving economy and an indication from the Federal Reserve
that we are going to have interest rates that won't move up quickly in 2004.
Those things have led the path of least resistance to be up . . . A terror-
free holiday has also helped," said Matthew Johnson, head of U.S. stock
trading at Lehman Brothers, to The Wall Street Journal. It is this consensus
view that has also led the broader market, particularly tech stocks, to rally
this year. The Nasdaq Composite Index soared 50% in 2003, its largest increase
since 1999 and its third-strongest yearly gain since the index began in 1971.
Some market watchers also see no reason why celebrations should not continue
well into 2004. "We haven't really received any major earnings warnings, which
sets us up for a pretty good fourth-quarter earnings season, and one reason
why there's a lot of enthusiasm," commented Peter Cardillo, chief strategist
and director of research at Global Partners Securities, to Reuters News. On
the economic front, a greater-than-expected leap in December's Institute for
Supply Management index supported optimism for continued economic growth. For
now, overvalued stocks, lackluster corporate tech spending and concerns of
whether there would be a second-half 2003 rebound all seem like remote
pessimistic memories. "This was a great year on all counts," said Charles
Blood, senior market strategist at Brown Brothers Harriman, to Dow Jones
Newswires, "We fully turned the corner and got a bull market going."
High-Tech Monday Update is provided courtesy of Thomson Financial. This
information is believed to be true and accurate; we take no responsibility for
inaccurate information and reserve the right to update our reports. For more
information, please visit our web site at http://www.thomson.com/financial.
SOURCE Thomson Financial
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