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Investors Rediscover High Tech

WASHINGTON—The bull market that helped boost the Dow Jones Industrial Average to its record highs last month has been fueled in part by technology stocks, and some analysts are predicting steady—if spotty—growth for that sector for the rest of the year. "From an economic standpoint, the second quarter [of 1986] was the bottom in terms of GNP, interest rates, computer manufacturing orders and shipments," said John C. Maxwell, senior analyst at Dillon Read & Co. Inc. in New York.

Stephen Greene
WASHINGTON—The bull market that helped boost the Dow Jones Industrial Average to its record highs last month has been fueled in part by technology stocks, and some analysts are predicting steady—if spotty—growth for that sector for the rest of the year.

"From an economic standpoint, the second quarter [of 1986] was the bottom in terms of GNP, interest rates, computer manufacturing orders and shipments," said John C. Maxwell, senior analyst at Dillon Read & Co. Inc. in New York. "The slope of growth from that point is positive but very slow, with few exceptions," he said. "The ones doing well are those in applications technology, rather than enabling technology."

Digital Equipment Corporation, Cray Research, Microsoft, Seagate Technology, Hewlett Packard and other computer-related companies saw their stock prices shoot up 30 percent or more in the first few weeks of the year, before profit taking checked their rise.

"Technology stocks have...

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