Top Techs for a Rebound

Beaten-down telecom and IT stocks are leading the post-Oct. 9 market rally. Here are S&P's best bets in those groups

By Michael Kaye

After a remarkably steep -- and quick -- decline, the stock market hit its low point on October 9, 2002. The subsequent sharp recovery has been led by the two sectors that had lost the most favor with investors: information technology and telecommunication services. Both areas have been the best performing groups -- as measured by S&P industry subindexes -- since the Oct. 9 lows, gaining nearly 40% each.

This upward move may be nothing more than a case of investors piling into the most heavily beaten-down sectors at the first whiff of a market upturn. But S&P analysts still think attractive opportunities are available within those two groups. In this week's screen, we've listed the stocks in the info-tech and telecom services group ranked 5 STARS (buy) by our analysts -- meaning that they're expected to outperform the overall market over the next 6 to 12 months.

• Affiliated Computer Services (ACS )


• Analog Devices (ADI )

• Cisco Systems (CSCO )

• Electronic Arts (ERTS )

• Fair Isaac (FIC )

• Microchip Technology (MCHP )

• Microsoft (MSFT )

• Overture Services (OVER )

• Symantec (SYMC )

• WebEx Communications (WEBX )

Kaye is a portfolio services analyst for Standard & Poor's

Before it's here, it's on the Bloomberg Terminal.