While the small and mid-cap names may have paced this rally early on, the large-cap companies are starting to play catch-up, and that's one big reason the indices have continued to climb despite an oversold technical tone. Among the stocks leading Monday's advance were Dell (DELL), Cisco (CSCO), Applied Materials (AMAT), Sun Microsystems (SUNW), Intel (INTC), SBC Communications (SBC), Apple (AAPL), KLA-Tencor (KLAC), Nextel (NXTL), Yahoo! (YHOO), EMC (EMC) and Seagate Technology (STX). Note that STX, which vaulted to a new all-time high, was profiled on our Story Stocks page last Friday.
The rotation suggests that institutional investors are beginning to fear being left behind and, as such, are putting their money back to work. They many not be comfortable with the lack of earnings visibility, but they're even more uncomfortable with the idea of another year of underperformance.
How much longer the sector can defy the overextended technical tone is anybody's guess. However, once Dell and Applied Materials release earnings this week there will be few short-term catalysts left. AMAT releases results after today's close, while DELL is set to report is numbers after Thursday's close.
With little news coming from the earnings front, market focus will shift to the economy, and here the news has been less positive. That shift, if and when it occurs, should dampen sentiment and trigger the much anticipated round of profit-taking. Don't look for declines to last long or run deep, however, as sidelined money won't hesitate to use a modest pullback to increase exposure to tech. Improved operating efficiencies, a more positive earnings trend, bullish intermediate and long-term technicals and money flows among the reasons why investors will treat dips as buying opportunities.
The rotation suggests that institutional investors are beginning to fear being left behind and, as such, are putting their money back to work. They many not be comfortable with the lack of earnings visibility, but they're even more uncomfortable with the idea of another year of underperformance.
How much longer the sector can defy the overextended technical tone is anybody's guess. However, once Dell and Applied Materials release earnings this week there will be few short-term catalysts left. AMAT releases results after today's close, while DELL is set to report is numbers after Thursday's close.
With little news coming from the earnings front, market focus will shift to the economy, and here the news has been less positive. That shift, if and when it occurs, should dampen sentiment and trigger the much anticipated round of profit-taking. Don't look for declines to last long or run deep, however, as sidelined money won't hesitate to use a modest pullback to increase exposure to tech. Improved operating efficiencies, a more positive earnings trend, bullish intermediate and long-term technicals and money flows among the reasons why investors will treat dips as buying opportunities.
