By Clyde Noel

Stock Report

Was that the sound of the raging bull getting ready to rumble last week? Or, was he just scratching the earth to let you know he’s still around?

When the Merrill Lynch analyst upgraded several semiconductor companies, technology issues took off. Then Intel’s CEO said an upturn in PC business is likely to occur in the second half of this year.

Investors have been looking for any kind of good news to open their pocketbooks. By the end of the week, the Nasdaq composite was up 37 points and the Dow Jones industrials increased 96 points.

The Town Crier 50 index is heavily infused with tech issue. By the end of the week, it was up 4.15 percent. For the year, the Town Crier index is down only 9.73 percent, compared to the Nasdaq composite index, down 16.36 percent for the year.

The reality check for investors to reconsider technical issues can receive another lift this week when Cisco Systems report their earnings. Anything more than 2 cents per share and the market will receive another bounce.

In addition to Cisco, there are some other beat-up names of blue chippers that could be ready to increase their stock values. Names like Intel, Agilent, Hewlett-Packard and Sun Micro are quality issues that were around before the dot-com boom and bust, and could be bargains.

The key to recovery and how strong it will be depends on the consumer. The $300 government bonanza ($600 for joint filers) is expected to help in the economic recovery, but saving it won’t help in the country’s turnaround.

During the next six months, we can expect to see evidence of the turnaround when more companies report increased earnings. The abundance of layoffs and R&D cutbacks will help increase profits at the bottom line. More favorable reports are what we need for a rally.

Standard and Poor regards the market’s risk-reward ratio looking out 6-12 months as favorable. They suggest an allocation of 70 percent equities (stocks), 25 percent bonds and 5 percent cash.

Trading will continue to be volatile until Labor Day. After Labor Day, we should be receiving corporate reports on how the companies will do in 2002. But: No one really knows what the next 6-12 months are going to bring.

Stocks in the Town Crier index with good movement last week were: Agilent, up 12.43 percent; Applied Materials, up 7.22 percent; Cisco, up 5.19 percent; KLA Tencor, up 8.44 percent; LSI Logic, up 15.01 percent; and Network Appliance, up 28.66 percent.

It doesn’t look like a bad move if we began to buy quality in high-tech stocks now.

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