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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 240.91+3.4%2:24 PM EST
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To: KeepItSimple who wrote (70662)7/29/1999 4:54:00 PM
From: Joe Mintz  Read Replies (1) of 164684
 
AMZN held up better than some others. SPLN, for example, has lost almost 40% of its value in the past few days.

Interest rate fears dominated markets today, stimulated by labor cost data in particular. The sell-off in bond and stock markets probably helped weaken the demand for dollars, prompting a strengthening in the Euro.

Theory remains unclear as to how this trend of rising interest rates would affect technology stocks although financial stocks and some other sectors would be likely casualties.

What has happened recently in the net sector is all too clear. Participants have been focusing on the speculative nature and potentially high downside risk to these growth stocks.

These inflationary pressures are not likely to end near-term. Oil prices have broken past 20 dollars per barrel, and other consumer prices look set to rise. Bond markets could remain under pressure.

One should therefore be quite cautious now about the internet sector. Some issues, especially those whose recent results fell below or just met expectations, could dive further. Yet overall, we do not really have a crisis, but on the contrary, normal cyclical trends in the economy.

The recent sell-off in some issues perceived as less liquid or as 'lower grade' holdings may have generated rather favorable buying opportunities for the patient investor.

For AMZN, however, the recent results present a cause for concern in a way. It may be difficult to convince the net consumer that AMZN ranks superior in all product classes against some more specialized competitors. Is AMZN going for broke?
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