“Investor Donald Kelley is back in action. After losing half of his savings — hundreds of thousands of dollars — in the technology-stock collapse that began in 2000, Mr. Kelley got out of the stock market entirely last year. But in recent months, the 70-year-old retired engineer has returned, buying Internet communications companies, tech-component manufacturers, even Chinese Internet stocks,” writes E.S. Browning in today’s Wall Street Journal.

” ‘I’m always interested in stocks if they are moving, and the technology sector has been moving,’ Mr. Kelley says from his home in Florissant, Mo.”

“Fueled by a few individuals like him plus a lot of fast-moving professional money managers, stocks — and technology stocks in particular — are jumping again. The Dow Jones Industrial Average reached a 14-month high early this week. The Nasdaq Composite Index, home to major tech stocks including Cisco Systems Inc., Microsoft Corp. and Intel Corp., hit a 16-month high Thursday. It is up 58% since starting its climb in October.”

“The run-up has brought back to Wall Street a whiff of the tech-stock craze of the late 1990s. One difference this time, though, is that some industry insiders doubt that the technology business itself can grow at levels needed to support the newly buoyant stock prices, raising questions about how long the market’s sprint can last.”

“While business spending on technology is finally growing again, it is a much more sober growth rate than a few years ago, say industry trade groups and corporate executives. Consumers, meantime, continue to hold back on widespread computer purchases, making some of the projections used to support tech-stock prices hard to justify.”

“Some investors don’t seem to care. Shares of Equinix Inc., a little company that runs hubs for Internet traffic — and that has never made money — have roughly quadrupled since January. GSI Commerce Inc., which helps big retailers manage Web-based sales, and is also without profits, has risen more than 600% since March.”

“It isn’t just tiny companies that are lifting off. Networking giant Cisco has seen its stock more than double since October. PMC-Sierra Inc., an unprofitable maker of communications chips, has quadrupled over the same stretch. Amazon.com Inc. has more than tripled in a year.”

“Some investors who acutely remember the Nasdaq Composite’s catastrophic fall — 78% in under three years — worry about what will happen to this resurgence. ‘We call this the echo bubble,’ says Steve Milunovich, Merrill Lynch & Co.’s chief technology strategist. He predicts, ‘This is going to end up badly again.’ “