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To: Jim Willie CB who wrote (5491)	10/4/2000 11:46:08 AM
From: Sully-	Respond to of 65232

Cohen Likes Tech Again But Nasdaq Still Spends Day Down in Dumps Even glowing remarks from one of Wall Street's most revered strategists couldn't pull tech stocks out of their deepening gloom. Investors all but ignored Goldman Sachs' Abby Joseph Cohen's first bullish words for tech stocks since turning more bearish March 28, and sent the Nasdaq composite down 113 points to 3456. The Nasdaq is off 322 points, or 8.5%, in three consecutive days of losses. Cohen's words usually carry more weight. She rightly turned bearish on tech stocks near the Nasdaq's top in March after being a tech bull throughout the '90s. Since Cohen's shift, the Nasdaq has lost more than a quarter of its value. ''Anytime she says something positive, the whole market moves,'' says Bob Basel, managing director of Salomon Smith Barney. Not even news that the Federal Reserve left rates untouched, as expected, could save the Nasdaq. Instead, investors continued sweating over how pricey tech stocks still are, although the Nasdaq has fallen 15% this year, says Hugh Johnson, strategist at First Albany. ''It's encouraging that Abby turned optimistic,'' Johnson says. ''But you have to swallow hard before buying (tech stocks). They're clearly not cheap.'' Consider that stocks in the Standard & Poor's 500's technology sector have a 71 price-earnings ratio based on 2000 estimated earnings, says U.S. Bancorp Piper Jaffray. The S&P's 500's 2000 P-E is 25. But even with the relatively high prices, many on Wall Street still think investors are finished panicking, especially after Cohen's calming words. ''There was no reason for the Nasdaq's slide,'' says Malcolm Fobes, portfolio manager of Berkshire Focus fund, adding that leading tech stocks ''have always been expensive.'' Fobes is loading up on such networking stocks as Cisco and Juniper, computer-chip makers such as PMC-Sierra, computer storage firms such as EMC and optical-networking companies such as Corning and JDS Uniphase. ''Yes, we're in for a soft landing. But companies we're investing in will (still) do well,'' Fobes says. Fobes agrees with Cohen's suggestion that while the economy is slowing, ''the backdrop for technology investments is favorable.'' Cohen also says in her research note that the slowing economy will lengthen the prosperous times. And technology will keep growing as a percentage of the world's gross domestic product, she says. Investors should also not worry themselves with the dozens of tech companies, ranging from Intel to Xerox to Priceline.com, that have warned revenue or earnings will miss estimates. The worst profit warnings are over, Cohen says. ''We expect 2001 to be yet another year of economic and profit expansion,'' Cohen says. ''If others come to believe the same, stock prices are likely to move upward.'' To see more of USAToday.com, or to subscribe, go to usatoday.com © Copyright 2000 USA TODAY, a division of Gannett Co. Inc. cnetinvestor.com Ö¿Ö