As U.S. Strikes Begin, Investors Cautious on Techs

After the United States began its attacks on targets in Afghanistan, investors around the world reacted by taking their money out of stocks. Some analysts, however, predicted a recovery will occur once the initial shock wears off.

Prudential Securities quantitative strategist Ed Keon said Monday that he expects a bounce in stocks following the U.S. military action.

“Our historical work suggests that the (market) rally that began two weeks ago maywell continue and perhaps become quite vigorous in light of U.S.-ledmilitary action in Afghanistan,” Keon wrote in a note to investors.

However, Keon cautioned that many issues are “not cheap” and said investors should “mimic U.S.military forces: act vigorously and confidently, but with discipline.”

U.S. stocks opened lower Monday, with the technology-heavy Nasdaq Composite Index falling below the 1600 level early on. For the rest of the day, however, the Nasdaq seesawed between positive and negative territory, finally closing almost unchanged at 1,605.95, up 0.65.

Quarterly Reports Near

The news of the attacks on Afghanistan comes as companies prepare to report quarterly earnings.

Some technology companies have said their results will not disappoint investors. Dell (Nasdaq: DELL) and Cisco (Nasdaq: CSCO) saw their stocks gain last week following reports that results for the quarter just ended were on target, even after taking into account recent events.

Dell closed Monday at US$23.12, up 56 cents, while Cisco finished at $15.05, up 11 cents.

Yahoo!, which will help kick off this quarter’s earnings news when it reports third-quarter results Wednesday, closed up 14 cents at $10.49.

eBay Unabated

Mirroring the Nasdaq, e-commerce stocks got off to a rough start early Monday before rebounding.

eBay (Nasdaq: EBAY) rose $2.02 to $55.42. Deutsche Banc Alex. Brown repeated a buy recommendation on the stock.

“Despite the fact that a lot of other companies in the industry are experiencing difficulties, [eBay] seems to be holding up very well,” Deutsche Banc Alex. Brown analyst Jeetil Patel told the E-Commerce Times.

eBay is “starting off the fourth quarter on a strong note” and has been a “consistently strong performer” over the past several quarters, Patel said.

Here to There

Travel firms, which according to Nielsen//NetRatings are beginning to see Web traffic reach pre-September 11th levels, had mixed results Monday. Travelocity (Nasdaq: TVLY) improved 60 cents to $18, while Expedia (Nasdaq: EXPE) rose a penny to 22 cents. Priceline (Nasdaq: PCLN) dropped 30 cents to $3.51.

Amazon.com (Nasdaq: AMZN) lost 8 cents to close at $7.12, and Drugstore.com fell 4 cents to 58 cents.

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