Newspaper article THE JOURNAL RECORD

Investors Putting More Money in Tech Stocks

Newspaper article THE JOURNAL RECORD

Investors Putting More Money in Tech Stocks

Article excerpt

NEW YORK -- Lucent Technologies, America Online, Hewlett-Packard and other telecommunications equipment and computer stocks may bounce back from their recent pastings, buying and selling patterns show.

More investor money flowed into these stocks than out even as they were declining, according to an analysis of money flow, an indicator of whether people are buying or selling more stock as the price ticks up, or as it ticks down.

More buying on the upticks boosts money flow and is considered bullish.

Money flow into some technology stocks is strong because even though Lucent and Hewlett-Packard, for instance, are vulnerable to the economic slowdown in Asia, many investors are confident that the companies will resume steady growth once the region's slump ends.

"Portfolio managers realize that the tech sector remains key for the future," said George Elling, an analyst at Lehman Brothers.

Looking at the net flow of money into a stock is important because a stock can decline even though few investors are selling it.

Such slumps come when no one wants to buy a stock at a given price, prompting middlemen on the New York Stock Exchange to cut the price to attract customers.

Many technology stocks have seen their prices drop and money flow out in the wake of Asia's economic troubles and price-cutting in the computer industry. But many large companies with proven records for overcoming adverse situations have remained on the good side of investors.

"There is a lot of money flow going into the tech sector, but people feel comfortable with just a few names," said Michael Manns, a portfolio manager at American Express Asset Management Group in Minneapolis, who helps manage $8.8 billion in large "growth" stocks.

Money flow analysis shows that Lucent, the largest maker of phone equipment in North America, still has lots of loyal buyers even though its shares fell as much as 16 percent since July 20.

When Lucent started falling, many analysts explained the drop by saying simply that Lucent had risen too far, too fast to justify further gains.

The stock rose more than sevenfold after its initial public offering in April 1996.

Without concrete reasons to sell, it's easy to see why managers are still accumulating the stock. …

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