Columbus Day means tech stocks re-discover forward momentum

By Scott M. Fulton, III, BetaNews

October 13, 2008, 6:07 PM

For the last several days, investors whose contribution of capital influx fuels the US technology business had difficulty determining which way was up. Today, on what for some was a holiday, they definitely found up again.

In perhaps the most welcomed rally in the history of the US stock market, a single-day 936.42 point surge in the Dow Jones Industrials (an 11.08% gain) indicated investors' newfound confidence in the British and European governments' respective bailout plans for their troubled banks. Almost every major technology stock participated in the rally, giving much needed support for some issues that were, and even still are, dangerously close to delisting.

Two weeks ago, a Goldman Sachs downgrade of Apple's stock help trigger a massive selloff, not just in Apple but in tech stocks across the board. Today, a Sanford Bernstein analyst (as reported by MarketWatch) saw Apple trading at way below $100 and said now is the time to strike. His upgrade to a "Buy" sent Apple stock soaring almost 14%, to $13.46.

American shares in German software giant SAP, whose plunge was seen as "Strike Three" for tech stocks just days earlier, rose nicely by over $5 per share to $38.90. It has a ways to go to locate $58 again, which is where SAP was trading as recently as September 25.

TiVo shares gained $0.89 to trade at something that looks less like the gutter at $6.34. And traders even had the heart to give Sirius XM a lift of $0.08 per share (an 18.6% gain) to trade at $0.51. Microsoft also traded up 18.6% at $25.50; and Google traded up nearly 15% at $381.02. Even Yahoo -- punished soundly by investors for not taking Microsoft's offer -- traded up nearly 10% today at $13.49. There's been talk about some blocks of Yahoo stockholders putting together a new deal with Microsoft now that Yahoo is such a bargain.

Still, companies won't be able to escape their own third quarter reports, which even if the worst is over for the economic downturn, could be a severe indicator of the storm tech companies have already weathered. Reminding us there's always a pot of something that's not gold at the end of every rainbow, Global Equities Research analyst Trip Chowdry was quoted by MarketWatch as saying, "The situation is pathetic...I think the worst is yet to come."