The tech sector bounces back

After getting off to a good start for the year, tech stocks slumped for most of the third quarter as fears of a double-dip recession dampened investor confidence. But IT companies, reporting strong sales especially to businesses, started to lead markets after the U.S. Labor Day holiday at the beginning of September. Apple and Intel, for example, reported record revenue and profit, while Microsoft announced it had the most sales ever for its first fiscal quarter. By November tech shares were back up to where they were two years ago when Wall Street crashed in the wake of Lehman Brother' collapse. Acquisitions highlighted a dynamic market in which cash-rich vendors are willing to spend top dollar to broaden their portfolio of services. Multibillion dollar deals included: Intel's purchase of McAfee for $7.68 billion; HP's $1.5 billion purchase of security vendor ArcSight and its $2.35 deal for 3Par; and IBM's $1.7 billion acquisition of Netezza. Now the question is whether the job market will improve enough to spur consumer IT spending back to pre-recession levels.