NEW YORK — People who invested in technology stocks in recent years aren't having much fun these days. But while they've been losing money, these investors have no plans to get out of the market.
They still believe chip, networking equipment and Internet stocks are where the real action is on Wall Street — despite last week's tumble that brought the NASDAQ composite index to half its record close of 5,048.62, set March 10. They feel they just need to be patient and look for good deals until the market finds its upward path.
But while investors hope the technology sector has finally found a bottom, some are still worried that stocks will plunge further as more companies warn of slumping sales and skimpier profits and as more signals seem to point to an economy that's slowing at an uncomfortably rapid pace.
"I can't watch anymore," said Sue Townshend, a West New York,
N.J., investor.
Still, she and many other technology investors are hanging in there because they believe that in the long run, tech issues are wise investments considering Americans' dependence on computers, cell phones, e-mail and the Web.
Like many other people who had invested heavily in high tech, Townshend has had steep losses, about $200,000 this year. Still, she doesn't intend to do any selling.
"What would be the point? I've lost too much," said Townshend, a Web site project manager.
Many other investors have been selling stocks since Labor Day, focusing on premium-priced technology companies that have warned of disappointing earnings. They've also run out of patience with high-tech firms that haven't turned a profit.
Investors also fear earnings will be increasingly vulnerable if the economy continues to slow more quickly than anyone expected.
Skittish investors also have been bidding down the Dow Jones industrials, which include tech companies like Microsoft and Intel. But blue chips, which also encompass less-risky stocks such as drug and financial issues, generally have held up better than tech stocks, and have even enjoyed some small rallies.
A forecast of poor holiday sales late Wednesday from PC maker Gateway set off last week's drop, the latest in a series of declines spawned by high-tech companies' profit warnings. But in spite of the consternation that earnings have caused on Wall Street, investors say they're concerned about much deeper issues — such as the possibility of rising inflation, an abrupt economic slowdown and the unresolved presidential election.
"I am uncertain as to where the bottom is," said Jim Davis, a truck parts distributor from Coral Springs, Fla.
"The election and high oil prices and over-inventory in the tech sector's PCs and microprocessors and falling prices in telecommunications and the economy slowing down, all combined speaks to uncertainty," he said.
Davis plans to dump his tech laggards before the end of the year so he can take a tax loss, but he'll also go bargain hunting for stocks that are now much more affordable.
"I believe there are some opportunities," he said. "I believe there has to be a bottom to Intel soon. I believe it will be the most profitable company in the world."
Other investors have the same year-end strategy.
"I am in an end-of-the-year 'selling the dogs' mode right now," said Bill Kearney, a mechanical engineer in Lexington, Ky. He's also looking for cheap tech stocks that are positioned to grow.
"If you are committed to being in the market, then you go looking for bargains when stocks are low," Kearney said, adding that he believes the NASDAQ will recover.