Intel said fourth-quarter sales are on track with forecasts. Xilinx, a maker of programmable computer chips, said it remains on track for 12 percent growth this quarter from last quarter. The company's shares sank almost 7 percent Wednesday after rival Altera said fourth-quarter sales will be on the low end of its forecast. The overall chip sector responded positively to the news. The Philadelphia semiconductor index rose 18.72, or nearly 3 percent, to 732.72.
Some analysts believe the tech run-up was caused more by excess cash than any fundamental news.
Meehan said fund managers sold many positions recently to generate funds to pay taxes, since the fiscal year for many funds ends in October. The selling also left a lot of cash on the sidelines, which had to be reinvested, and Meehan thinks fund managers will now defend their investments in technology. Investors also had some key economic data to mull over. The Labor Department said third-quarter productivity rose 3.8 percent from the previous quarter, a significant slowdown from last quarter's 6.1 percent jump. Unit labor costs increased 2.5 percent in the third quarter from the previous quarter.