Suddenly, Technology Stocks Look Good Again
Computer, Internet and telecommunications stocks are suddenly enjoying a resurgence, and some of the biggest beneficiaries of the rally have been value-oriented mutual funds, which until very recently would never have gone near a technology stock.</br></br>As the U.S. stock market has embarked on a strong advance since mid-year, the long-depressed Nasdaq Composite Index has played a starring role.</br></br>The index, 11 of whose 12 largest components are tech stocks such as Microsoft Corp., Intel Corp. and Dell Inc., climbed 21 percent from July 21 through the middle of last week, including dividends. That eclipsed a 13 percent total return for the Standard & Poor's 500-stock index and a 14 percent gain for the Dow Jones industrial average.</br></br>Talk about a role reversal. While the Dow has been hitting record highs and the S&P 500 has climbed to a six-year peak this week, the Nasdaq index remains more than 50 percent below the lofty heights it reached in 2000.</br></br>But if a particular group of stocks is down, that doesn't mean it's out. In keeping with their long tradition of bargain-hunting among neglected sectors of the market, several prominent managers of value funds began buying tech stocks a year or two ago. That put them in good position to reap the rewards of the Nasdaq revival.