By: Dennis Hobein.

Contributor, Stock Traders Daily

(La Jolla, CA) Taking a look at the staggering gains achieved by many widely held technology bellwethers, such as Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOG), it seems we have been living in 1999, not 2009. Shares of Apple are up over 100% since the beginning of March, while Google has seen a 45% increase. From a broader perspective, the Powershares Trust (NASDAQ: QQQQ), which correlates to the performance of the Nasdaq 100 index, is up nearly 50% over the same time period. Is it fair to say that we have gotten a bit ahead of ourselves? The aforementioned stocks’ valuations appear to be slightly extended, but still reasonable, with Apple’s P/E ratio at 30.9x and Google’s at 22.4x (based on fiscal year ’09 earnings estimates).

However, given the batch of troubling economic news this week -- non-farm payrolls came in much worse that Wall Street expected today -- analysts’ estimates may eventually see downward revisions as expectations for an economic recovery hit the brakes. With this risk in mind, money managers may shift assets into non-riskier positions, in a “flight to quality” transition. Typically, sectors such as non-discretionary consumer, health care, and utilities see increased interest. Dividend yields and stable earnings become the focal points. Therefore, names such as Johnson and Johnson (NYSE: JNJ), Pfizer (NYSE: PFE), and Exelon (NYSE: EXC) find renewed interest.

Despite today’s worrisome unemployment and labor data, Apple and Google are still posting gains for the session. In fact, two prominent sell-side firms raised their target prices and ratings on Apple shares today, which accounts for the strength in the stock. The fact is, people still love iPhones and iPods, and these devices have essentially been “recession proof.” In regards to Google, it has recently stated that it is back in the acquisition game, hinting that its search business is strong and still gaining share.

So, the question is, can these tech giants’ stocks continue to perform as if it was a decade ago, or will the heightened expectations become too much to bear with an economy and consumer that is still obviously struggling. As corporate earnings begin to trickle out over the next couple of weeks, investors will get a solid indication if company’s can hurdle a higher bar in the third quarter versus the second quarter.