On Monday the Fed released the Industrial Production and Capacity Utilization report for February. The headline number, a decline of only 1.4%, was not bad enough to cause stocks to give up the prior week's gains. Indeed, stocks rallied strongly today, led by the NASDAQ with over a 4% gain. Is the gain in the NASDAQ justified? The following chart tracks the month-over-month percent changes in production in the three tech sectors tracked by the Fed. The numbers are seasonally adjusted. There is a real combination of good news and bad news here. First the good news: Production in the Computers and peripheral equipment sector, though still declining, is not declining as fast as it did last year. Semiconductor production, while still showing negative growth, has at least bounced strongly from last November's deep low. Now the bad news: Communication equipment, which had shown positive growth in production has joined the other sectors and has now begun to show a decline. Production ...