Stock Market Rally Essay, Research Paper
Wow, what a day on the market today. Technology stocks soared on the news of the new gigahertz processor release. Computer makers like Gateway and Dell saw their shares increase by 68 and 42 percent respectively. Both companies expect the release of this new computer chip to boost sales tremendously. Intel, the maker of the chip also experienced a sudden spike in its stock price. It opened the day slowly, fluctuating around the 100 dollar price, but right before the bell it soared to close at 163. This was not the only story today on the NASDAQ, which again turned in a record day to close above the 5000 mark. The new company Palm announced it was in the works of developing the first wireless handheld computer. On this news investors immediately began to buy into the stock sending it from its open price of 23 dollars a share to a high of 119. However there was a sell off at the end of the trading day and Palm closed at a price of 86 dollars. Technology again has seemed to drive this market. The news on the Dow side was not as pleasant. The Dow again continued its plummet as it fell below the 9000 level. Stocks like Home Depot and GTE saw a drastic decline in its stock value as both companies lost more than 35 percent today. All across the board the Dow Jones companies were seeing red for the fourth day in a row.
It seems that investors would rather take their money out of some of the blue chip companies and invest in stocks that have the ability to make great gains in a shorter period of time. This is great as long as they are investing in companies that have good financial management teams, but it is still hard to determine the real value of an internet stock who does not produce a revenue. Investors agree that diversification is the best policy. Most believe that mutual funds driven by a mix of technology and blue chip stocks remain the safest as far as long term growth is concerned. One final note on what to expect tomorrow when Allan Greenspan is scheduled to speak. Investors seem to agree that Greenspan will hold off on raising the interest rates. This could produce another buying frenzy for investors. Look for them to buy not only technology stocks, but also some of the more undervalued Dow stocks that have taken a beating as of late. However, if Greenspan does go against investors and raises the rates we could be in for a major sell off and profit taking. Whatever happens we will again have all your stocks and technology reports right here tomorrow.