NEWS AND COMMENTARY November 1, 2000 Technology-Stock Revival May Not Last for Long By Robert McGough and Ken Brown, The Wall Street Journal Non-Tech Stocks Won't Fare Any Better as Bear Stalks Wall Street ... Weiss comments NEW YORK - Now that the scary month of October is behind us, all those beaten-down technology stocks are going to rise from the grave and show a pulse again, right? Well, they sure looked lively Tuesday. But don't bet your last dollar that a sustained bull market in tech shares is under way once again. Investors who crave a tech revival are pinning some of their hopes on the end to "tax-loss selling" by mutual funds, which occurred Tuesday. The thinking is that mutual funds have dumped all of the money-losing stocks they intend to this year to meet an Oct. 31 tax-loss deadline and will soon be on a buying spree again. The bad news: It appears that most funds doing tax-loss selling have already put the money back to work, buying other stocks. Some tech stocks may indeed have sharp rebounds, but that movement may end in a matter of days -- and soon after, tax-loss selling by individuals and taxable institutions is apt to continue for the rest of the year. Institutional and individual investors have been moving their money out of tech stocks, but it won't be long before they abandon the market entirely. Yesterday's rally is already evaporating this morning as two more companies, Worldcom and Altera, announced lower profit forecasts for the fourth quarter and into 2001. We've already told you about several other companies that are in the same boat. Slower sales growth and higher costs are eating into everybody's bottom line. And it's not isolated to technology companies. Non-tech companies such as Gillette and Procter & Gamble have admitted that third quarter earnings stunk. What's more, the economy is slowing down, which means earnings news will be just as bad next quarter. Nearly every sector in the market has been walloped, and trying to find a stock that won't get burned is a difficult task. When investors realize the good times are gone for now, they'll stampede for the exits.

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