High tech’s mystique may be over

Investors have been waiting impatiently for four years for the high-tech sector to lead Wall Street to new heights, and they’re likely to be cooling their heels for quite some time to come.

Technology stocks tend to have more volatility than the broader market, screaming higher on good days and plunging lower on bad ones. Wall Street analysts say not to expect a repeat of the explosive dot-com boom in the late 1990s, and instead be comfortable with techs playing a role in a market run – not leading one.

“This is the end of the tech mystique,” said Ed Keon, chief investment strategist with Prudential Equity Group in New York. “We can have a strong market without technology being a leader because we observed it just last year. The cyclicality in technology stocks is clear to see, even though it might have been obscured in the late 1990s.”

While the market doesn’t specifically need tech to lead it higher, there is some speculation that the sector could be primed for a cyclical advance.

Earnings from the sector have been among the market’s weakest. S&P 500 components have been struggling to continue 18 straight quarters of double-digit growth; so far, fourth-quarter results are up about 9.8 percent. Technology companies, which account for about 15 percent of the index, have posted a 1.78 percent decline in the fourth quarter from the year-ago period.