But that's just part of the story. The average Nasdaq stock is now down a whopping 44 percent, says Anthony Dwyer, chief market strategist for financial firm Kirlin Securities, in New York. Moreover, the sector continues to be battered by uncertainty about about the direction of interest rates and slowing profits, Mr. Dwyer says. A new report by Wall Street investment house Salomon Smith Barney, forecasting weakening demand for computer chips, has also sent negative tremors through the high-tech arena. Still, don't count technology out, most experts agree.
Selectivity is now more important than ever.
Indeed, health and biotechnology funds continue to outperform the broader market, in part reflecting a steady introduction of exotic new products - not to mention the mapping of the human genome. Also, conventional technology firms, including cellular companies and telecom firms, should post solid gains in the months ahead as investors see a slower, moderating economy, says Dwyer. Global companies continue their drive to boost productivity and profits through modernization and computerization. That stoppage contributed to the selloffs of dotcom stocks by individual and institutional investors in the past few months, Mr. Kadlec says. Not surprisingly, mutual funds that invested heavily in the go-go dotcoms as well as traditional tech firms were pummeled during the second quarter.