Tech stocks ride a roller coaster while Congress deliberates

One moment it's all doom and gloom, and the next it's brighter days ahead. But with Congress actually uttering the "D" word in place of the "R" word as debate on the bailout bill continues, the market now consistently lacks stability.

With Congress having taken yesterday off for the Bank Holiday, investors saw opportunities and potential bargains everywhere they looked, especially with Apple stock trading at a 16-month low. So injecting a much-needed dose of confidence back into the markets, the buyers came back yesterday, giving Apple an 8% boost, responding to what was the single largest Dow 30 point drop in history by looking forward to better times.

The NASDAQ index leapt back over the 2000 mark yesterday, rising 98.6 points to close at 2082 and change, and bringing many tech stocks up with it. Intel came back 8.5% to close at $18.73 per share, US shares in RIM surged 10.6% to $68.30, and AMD -- a tech issue to which the adjective "struggling" has seemed permanently affixed of late -- regained a tremendous 22.3% of its value to close at $5.25.

Apple's share value was helped when a Goldman Sachs analyst yesterday afternoon reportedly stated that the market's severe response to an earlier Goldman Sachs downgrade of Apple stock, was unwarranted.

Suffering from chronic bipolar disorder, though, the party abruptly ended Wednesday morning. AMD, for instance, lost 12% of its value once again just by 10:40 am EDT; while Intel lost just under 3% by the same time, and Apple dropped about 4.4%. This as the Dow 30 dove back down to a loss of over 170 points, and the NASDAQ index dropped nearly 32.

What's going on? The undercurrent of uncertainty regarding the revised economic bailout plan, taken up by the Senate this morning (while the House continues its holiday), has every sector of the American economy in turmoil. Assuming a best-case scenario, the nation's credit markets will be tighter. Financing for small startups will be harder to come by, and financing for big firms to acquire small startups will be just as hard. That means research-driven companies like Cisco and HP may have to look more in-house for their innovations, but that'll be even more difficult as they implement already planned layoffs or consider new ones.

In a strange, "one-off" case, Google can ironically chock up computer error as the cause of what appeared to be extreme uncertainty during the close of trading yesterday. Orders for Google shares appeared to have been placed within a five-minute period straddling the top of the 4:00 pm EDT hour, whose value swings were as much as $25.

Reuters reports this morning that NASDAQ has decided to cancel trades committed during that period, resetting its closing value on the low side of the swing, at $400.52. That actually helped Google shares buck the negative trend this morning, with bargain hunters capitalizing and sending Google's value up nearly $7 by 11:00 am.

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