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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: John F. Dowd who wrote (62380)	10/31/2001 8:53:15 PM
From: t2	Respond to of 74651

Does anyone know why MSFT got dumped just before the close? It had a wide trading range - what is going on here? Any clues? There are clues. IBM is going to be initiated coverage by Morgan Stanley at "neutral" because of valuation. I think IBM dropped late day and afterhours, just before rebounding later. The other reason could just be month end tax selling OR year end window dressing by mutual funds. If tax selling ends today, one would expect more selling than buying on a day like this as funds work out the capital gains/losses for this year...not sure if tax loss selling ends today or last week (because of the days to settlement). Window dressing is probably still happening today as I believe that is based upon upon sell date and not settlement. The BIGGEST FACTOR (IMHO) Could BE: If one was afraid to get a capital gains from a fund (even after it had dropped in value), you would want to pull out days before month end and buy back later. That would lead to short term, temporary, outflows from mutual funds leading to selling...only to come back in beginning in November. Could be a factor that led to drops in many stocks late day. The last point I noted has probably been a big reason we had a weak market in the past 3 days....includes today as much of the gains were given up. That would explain the weakness in the last 3 days....some selling of larger holdings like MSFT today would make sense to meet the possibly large redemptions. Note that MSFT is still a large holding many big mutual fund families unlike other techs that had been dumped by so many funds over the past few months. I think in this scenario we should reverse the recent losses in the next couple of days. JMHO of course.