By Clyde Noel

Town Crier Correspondent

2 new companies added to index

Stock Report

Buoyed by increased interest in technology shares, investors wrapped up the last trading day of the second quarter in an optimistic mood.

In reviewing the first-half year results, two companies will be deleted from the index and two companies with executives living in Los Altos are added.

Added to the Town Crier index are Heritage Bank Crop (HTBK) of San Jose, and Veritas Software Corporation (VRTS) of Mountain View.

Heritage Commerce Corp. is the holding company of Heritage Bank of Commerce, Heritage Bank East Bay, Heritage Bank South Valley and the Bank of Los Altos.

Veritas Software Corporation designs, markets and supports enterprise data storage management solutions. The company provides storage management software for protection against data loss and file corruption.

Removed from the index are Covad Communications (COVD). Two law firms have filed a class action suit against Covad. The stock is priced at 84 cents and historically, Nasdaq delists stocks valued under $1.

Also removed from the index is Brokat Technologies (BROA). At its annual shareholders meeting in Stuttgart, Germany, last week, the company announced it will reorganize into three separate business units. The stock hit a 52-week low of $1.23 June 28.

Analyzing the Town Crier index at the half-year mark, Nvidia (NVDA) is ahead 181 percent. Other companies showing an increase: Apple Computer, 63 percent; ESS Technology, 103 percent; KLA-Tencor Corp., 74 percent; Legato, 112 percent; and VISX, 85 percent.

After last week’s cut in interest rates by the Federal Reserve Board and Alan Greenspan’s comments, investors hope lower rates will prop up the economy.

The best piece of advice for investors for the rest of the year is to diversify into good stocks. Technology may look good, but there is still too much capacity and too many companies competing for the technology dollar. Outside the tech/telecom industry, the prospects for a good return on an investment is good.

Once technology companies earnings expectations are no longer deteriorating and the mass layoffs stop, then it’s time to reevaluate technology stocks.

Noel, a seasoned investor, covers the stock market for the Town Crier.