E-stock carnage cause for concern

Every financial commentator in the country has said for some time that the rise in the value of Internet stocks that have been driving the American market ever upward has been unreasonable and would at some stage correct itself.

It would seem the correction is well and truly underway. In statistical terms it is quite interesting to look at the score sheet to this date this calendar year.

Companies such as Yahoo! and America Online have fallen 50 per cent, Ebay is down 70 per cent and is down 60 per cent.

The current carnage appears to be confined to the technology and communications sectors.

However, combine the fallout in that sector with the possibility of an interest rate hike, as suggested by Dr Alan Greenspan, and we have the hallmark conditions for substantial weakness in the market.

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