Dow and NASDAQ: Parting on the Bear

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One used to be "in" tech stocks — now you're "exposed" to them. And as the tech sector, led by a Lehman Brothers downgrade of Cisco, continued to burrow deeper into its funk, the musty old Dow Jones is getting hot again.

Still feeling rosy about the interest-rate picture after Friday's soft-landing-esque GDP number (and 200-point attendant rally), and finding that the Old Economy giants may have some rallying in them in this uncertain fall season, investors goosed the Dow up 244 points Monday while pushing the NASDAQ down 86. This may be what the Treasury-bill folks call a "flight to quality."

The Dow was largely excluded from the recent hypervaluation of tech stocks, and so now is it being largely excluded from the bloodbath on Wall Street's hipper half. Mostly, what the Dow has been doing lately is a jagged languishing, seesawing from 10,500 in May to 11,250 in September down to the magic 10,000 this month.

At which point it hesitated, and may now have officially taken on the look of a bargain. The index closed Monday at 10,835, and for the near term could be on its way up. Sure, oil prices loom, the euro drags, the Middle East smolders, and the word "stagflation" is on at least a few lips, but for now that's troubling the NASDAQ far more — over there they're worried about the damming effect an economic slowdown will have on the river of cash that made the techs what they were.

On the Dow side, though, that stuff is still catnip for Alan Greeenspan, and lower interest rates is what America's big companies crave. So as the economy slows down — without screeching to a halt, of course — blue-chip investors like their chances for a bullish winter and spring, and Dow 13,000 has been bandied about rather credibly lately.

No wonder they're getting in now.