NEW YORK, May 18: The tech-heavy Nasdaq Composite Index on Friday ended its best week in more than a year and some money managers are cautiously optimistic that after several false starts this advance may have staying power.

Solid earnings from bellwethers like Dell Computer Corp., the No. 2 personal computer maker, on Thursday, and Cisco Systems Inc, the No. 1 Internet equipment maker, on May 8, have bolstered expectations for technology stocks after two years of declines.

We may have reached a point where after going down week after week, the sellers are washed out and we will have positive reactions to good news, said Joe Stocke, managing director at Malvern, Pennsylvania-based StoneRidge Investment Partners LLC, which oversees $1 billion in assets.

We are not going to go straight up but it’s sustainable to the extent we get positive news.

The Nasdaq, the benchmark gauge for the health of the technology sector, rose 10.95 points, or 0.63 per cent, to 1,741.39 on Friday, for a gain of 8.8 per cent for the week.

It was the best weekly performance for the index since April 20, 2001 when the Nasdaq jumped 10.3 per cent, according to Reuters analytics. Friday’s gain also marked the first five-day advance for the Nasdaq composite since Oct. 6, 2001.

Other anecdotal evidence showing that the worst may be over for tech shares came from industry group Semiconductor Equipment and Materials International.

North American makers of semiconductor equipment recorded a rise in orders for the fifth consecutive month, giving further credence to the belief that the semiconductor slump is over, the group said.

Stocks across the board have been been helped by better-than-expected results, said Tom McManus, chief US strategist with Bank of America, in a note to clients on Friday.

Some better-than-expected results may have sparked the rally, he said. But it seems that last week’s productivity report may have boosted confidence in earnings growth estimates, triggering some asset-allocators to buy stocks and sell bonds.

US worker productivity raced ahead in the first quarter at the fastest pace in almost 19 years as profit-hungry businesses squeezed more from their employees instead of taking on new hires amid a patchy economic recovery, a May 7, govt report showed.

To be sure, the Nasdaq Composite has a long way to go before it reaches the lofty level of 5,048.62, its all-time closing high of March 2000. And few are willing to bet that it will go to those heights anytime soon.

Companies like Nortel Networks Corp. and Lucent Technologies Inc. are not the best for big ticket sales, as they are not in a position to buy, Asher said.

Without big demand, technology companies will still face problems improving sales and profits, a necessity for a sustained rally in share prices, according to money managers.—Reuters