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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: Uncle Frank who wrote (32560)	2/26/2000 9:32:00 PM
From: Eski	Read Replies (1) \| Respond to of 77400

Top Financial News Sat, 26 Feb 2000, 9:24pm EST Nasdaq May Top 5000 on Demand for Computer, Telecommunications Shares By Nick Olivari Investors See Nasdaq Index Topping 5000: U.S. Stocks Outlook New York, Feb. 25 (Bloomberg) -- Nasdaq 5000? Some money managers say the Nasdaq Composite Index is headed toward another milestone, driven by demand for shares of computer and telecommunications companies. ``We don't see any major glitches in the tech story,' said Dan Cook, a money manager with StoneRidge Investment Partners LLC in Malvern, Pennsylvania, who manages $880 million. ``Business looks good and the money is flowing' to Nasdaq listed stocks. The Nasdaq gained 4 percent this week, about half of the amount it would take to reach 5000. The index finished the week at 4590.50, falling 27.15 points on Friday. The index closed at a record on Thursday. One reason managers such as Cook are optimistic that the Nasdaq index is headed higher is that as the index has been outperforming the Dow Jones Industrial Average, they expect more money to flow out of companies such as International Paper Co. and American Express Co., and into stocks like Cisco Systems Inc. The Nasdaq is up 12.8 percent so far this year, compared with a decline of 14.22 percent for the Dow average and a drop of 9.25 percent for the Standard & Poor's 500. Edmund Cowart, a fund manager at Eagle Asset Management Inc. which oversees $7 billion in St. Petersburg, Florida, said it's significant that the indices have gone in different directions on a large number of days this year. The Nasdaq has gained on 12 days this year when the Dow fell. According to MarketHistory.com, the last time the performance of the indices has diverged over a similar period of seven weeks was in February 1999 and before that in March 1998. Cowart said that tells him money is flowing out of industrial companies and into the telecommunications, computer and biotechnology industries that account for about four fifths of the companies in the Nasdaq index. ``Money is moving from value to growth,' said Cowart. ``It's rotation into the things that have been working like Cisco Systems and out of the things that are down and out.' Indices Diverge Cisco Systems closed the week at 132 3/4, a gain of 5.5 percent. With a market value of $454 billion, it recently overtook General Electric Co. as the world's second-largest company and is now closing in on Microsoft Corp., which has a market capitalization of $475 billion. For the week, the S&P 500 index declined 0.95 percent, led by Fluor Corp. and Novell Inc., each of which dropped more than 25 percent. The big gainers in the S&P for the week included Mirage Resorts Inc., up 29 percent, after MGM Grand Inc. offered the acquire the company for $5.5 billion. Gateway jumped 24 percent after the company unveiled alliances with Sun Microsystems Inc. and OfficeMax Inc. aimed at boosting sales of the personal computers it makes. The Dow Jones Industrial Average fell 3.4 percent this week, closing below 10,000 for the first time since April. 6. The decline contributed to reduce the price-to-earnings ratio for the index to 23 from a high of 28 in September. Microsoft Could Gain Microsoft, the biggest company in the S&P 500, fell almost 4 percent this week. The No. 1 software maker has tumbled 22 percent so far this year. Price Headley, president of BigTrends.com, a stock and options advisory firm in Lexington, Kentucky, said Microsoft could be poised to rebound. He pointed to a technical indicator showing that the stock closed below its 200-day moving average on Wednesday. When the price falls below that line it ``has historically been an excellent time to buy,' he said. For 14 of the last 17 occasions when Microsoft has dropped to its 200-day moving average, the stock has gained an average of 26.1 percent in the next four months, Headley said. That compares with an average drop of 7 percent on the three occasions it fell over the four months. Headley recommends buying call options that allow the holder to purchase the stock for 100 by July 20 on expectations the stock will move higher within the four-month time frame. StoneRidge Investment's Cook is considering adding to the Microsoft shares the firm owns. In the interim, he's been buying semiconductor equipment maker Applied Materials Inc. and computer network equipment maker Extreme Networks Inc. Next week, investors will be looking to February's unemployment report and changes in average hourly earnings to be released on Friday for more evidence of the size and possible timing of Federal Reserve interest rate increases this year. ``If hourly earnings growth is above the 0.3 percent expected, it may be the confirmation that Greenspan is right and inflation is ticking up,' said Michelle Clayman, chief investment officer at New Amsterdam Partners LP, which manages $1 billion. ``That could make for more bumps in the market.' Companies expected to report earnings include Dayton Hudson Corp., Litton Industries Inc.