Drugs and health-care stocks were modestly higher and consumer cyclicals were rebounding into positive territory. Utilities, transports and financials retreated. Chips were the strongest group Friday. Robertson Stephens also forecast a rebound in processor sales. Tim Heekin, the director of trading at Thomas Weisel Partners, said people were putting money to work after the recent pullback.
People are comfortable with the absolute lows put in and looking to cautiously accumulate.
The key to buying tech and telecom this year is your entry point. That's a reference to the price at which investors buy a given stock. Since this year's gains in the technology sector are likely to be relatively small and price movements volatile, that purchase price can spell the difference between a big loss and a sizeable gain down the line, Heekin said. So as prices come down to more attractive levels, portfolio managers who lamented missing the run-up of the past two months are risking the possibility of more declines because they can't afford to miss another rally. And a big sell-off remains a real possibility.