Stock streak shows no sign of stopping

Turning in the kind of performance not seen since the end of the last bull market, the Nasdaq composite Wednesday set its fifth 2003 high in a row — a notable achievement considering the tech barometer is carving through territory not seen in more than 17 months in its new bull run.

The last time the Nasdaq set five consecutive highs in a bull market? December 1999, MarketHistory.com says.

If the Nasdaq manages to notch even a modest gain today, it would be the first time since the halcyon days of February 2000 it has strung together seven up days in a row, Scanshift.com says.

Certainly, the Nasdaq isn't powering higher alone. The Dow Jones industrial average and Standard & Poor's 500 indexes also set 2003 highs a second consecutive day Wednesday, signaling health in the broader market. Yet the Nasdaq's streak shows:

• Tech is the leader, again. Hardware, software and semiconductor stocks had been slipping vs. the broader market as recently as mid-August. But those groups have rebounded so fast, especially semiconductors, it's clear their leadership's intact, says Wells Capital Management strategist Jim Paulsen.

• The bond scare is over, for now. Part of the reason behind the pause in tech stocks was the rapid run-up in bond yields. Some investors opted for bonds, rather than taking the risk of tech stocks. But with bond yields holding steady, tech stocks are getting a second wind, Paulsen says.

• Streaks aren't always meant to be broken. Some investors may assume the Nasdaq must pause from its current six-day streak. Not necessarily. The Nasdaq has gained six consecutive days 184 times in its history, says Gibbons Burke, editor of MarketHistory.com. But 69% of the time, it was even higher 21 trading days after the streaks ended.

• Tech investors are already thinking good thoughts about 2004. Bullish comments Wednesday about August sales by Cisco Systems' CEO have investors "more optimistic" about tech earnings in the fourth quarter of this year and in the first half of 2004, says Ryan Smith, trader at Banc One Investment Advisors. "It's not too soon to be thinking about next year."

• September concerns are easing. Investors were fearful going into September, since it tends to be a bad month. However, those fears may be wrong, says Sam Stovall, strategist at S&P, who found that in the first year of a new bull market the S&P 500 gained in September 67% of the time.

But investors shouldn't get too carried away. Many leading tech stocks, such as eBay, have started to peter out. "Yes, streaks are bullish," Burke says. "But there are times they're not."