By Scott Moritz
Panic sellers who sent the Nasdaq down 9%, its steepest one-day drop since the Internet bubble burst in 2000, were replaced by bargain hunters Tuesday. In mid-day trading Google shares were up 8% and RIM's stock bounced 10%. Apple was up 5%, while the Nasdaq as a whole rose 3%.
Apple was one of the biggest losers Monday, falling18% after two analysts downgraded the stock on fears that Mac sales were going the way of the rest of the PC market. FORTUNE's Philip Elmer-Dewitt, however, pointed out that some of the gloomy predictions were based on a survey of business IT buyers, not quite Apple's core market.
Other analysts came to Apple's defense Tuesday. Goldman Sachs' David Bailey reiterated his buy rating saying the stock was oversold.
"We think yesterday’s 18% decline more than captures the concerns over Mac growth in a weakening spending environment, making Apple shares attractive at current levels," Bailey wrote.
Monday's broad selloff, and in particular the Nasdaq's plunge, kicked into high gear after lawmakers failed to pass a Wall Street bailout bill. Amid fears that the current credit crunch could push the economy into a deep recession, not even the tech sector's lack of debt and strong cash position were enough to keep panicky investors from bailing.
Tuesday's rebound offered some solace, but as Monday's collapse showed, tech is along for Wall Street's ride, like it or not.