Technology leads current stock market rally

The NAS’ steady rise towards 3,000 is outperforming the DJIA and the S&P 500, driven by its large technology components.

The Tech sector shows just how much a heavyweight it is in this market. The S&P Tech sector now accounts for 20% of the total S&P 500; a weighting not seen since the tech bubble burst in Y 2000.

Whether you look at the broader market by the week, the month or the year, the Tech sector pushes its way to the top of the performance list.

The Tech sector has very few enemies in Washington DC.

At a time when so much attention is being paid to Apple’s (NASDAQ:AAPL) $100-B cash pile, savvy observers worry that investors might need to lower their expectations in light of the US President’s budget proposal, especially targeted increases in the capital gains and dividend tax rates.

As a lot of tech companies increase their dividends or actually initiate them, and this is going to create some sort of uncertainty, and that it is also one reason why so many companies are hoarding cash to begin with.
The silver lining to this dividend disappointment is that it could possibly lead to more M&A.

Given the recent rise in the sector, as well as the performance discrepancy at the industry level where Hardware stocks are up 18% year-to-date, Semiconductors are up 13%, but the Software group has gained only 8%, LTN is partial to software because it is the laggard in here.

Paul A. Ebeling, Jnr.

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Posted by Shayne Heffernan on Feb 21st, 2012and filed underLatest News, Technology, USA.You can follow any responses to this entry through theRSS 2.0Responses are currently closed, but you can trackback from your own site.