Why? Analysts say part two of Federal Reserve Chairman Alan Greenspan's testimony before Congress in mid-week may be the catalyst, forcing investors to rethink galactic tech valuations at a time when borrowing costs are expected to rise.

Technology may still deliver fat gains as interest rates move up, Wall Streeters say. But they also warn that there will come a time when increasing lending costs will force Corporate America to cut back on capital spending, hurting highfliers like computer and software makers.

"As investors digest the Greenspan news, the question is at what point do they believe technology stocks will be affected by higher interest rates," said George Rodriguez, senior vice president at Guzman & Co. in Jersey City, N.J. "It is bound to happen."

In fact, the Nasdaq composite index (.IXIC), which features some of the biggest names in tech including software behemoth Microsoft Corp. (MSFT.O), last week finally showed signs of caving in to interest rate pressures.

On Friday, the technology-rich index slid 137 points, or more than 3 percent as Wall Street fretted over hawkish comments Greenspan in congressional testimony had made the previous day. But the Nasdaq still ended up about 0.37 percent for the week at 4,441.

This week's second part of the Humphrey-Hawkins testimony to the Senate is not expected to differ from Greenspan's comments last week before the Banking Committee of the House of Representatives. But there is always the chance he may trigger more alarm in a question and answer session that follows.

On last Thursday, Greenspan signaled that more rate hikes may be necessary to prevent the economy from speeding out of control, sending the Dow Jones industrial average (.DJI) down 1.97 percent, or 205 points, for the week to 10,219.

The slide shoved the 30-stock index back into correction mode as fell more than 10 percent — 11.10 percent to be exact — from its Jan. 14 closing high of 11,722.98.

"There is certainly a good part of the market that has sensitivity to interest rates," said Rick Meckler, senior managing director at Liberty View in Jersey City, N.J. "But if interest rates keep going up, there will be less capital spending which means that starting with PC makers to all they way down the line will see some slowdown in spending."

This week, a shortened four-day trading period because of Monday's President's Day holiday, will also be the week of reckoning for the nation's top retailers with many expected to report earnings.

One of the first out of the gate will be home improvement retailer Home Depot Inc. (HD.N) on Tuesday followed later in the week by Gap Inc. (GPS.N) and J.C. Penney Co. Inc. (JCP.N). Retailing stocks have been beaten up in recent weeks as the Fed has warned that consumer spending must ease up to keep the economy from blowing a gasket.

Unless the retailers' earnings disappoint, analysts suspect the sector may start to bounce back along with financial services companies, which have also been punished for being sensitive to interest rates.

"I would say that I would expect that the financial services and retailing sectors are about to find support levels," Rodriguez said. "I expect them to bounce back and I expect that technology stocks will find inflation pressures may start to catch up with them."

This week is rather light on economic data, but Wall Street will scrutinize January durable good orders and fourth quarter gross domestic product figures for clues about the economy's health.

January durable goods orders are due on Thursday morning, with economists surveyed by Reuters looking for a 0.9-percent drop in monthly orders for big-ticket items like washing machines and airplanes.

On Friday, the government will report the final numbers for fourth quarter Gross Domestic product.

"GDP is always interesting, but its ancient history by the time you get it," plus this is the final look at the number, said Jose Rasco, senior economist at Hoenig.

"This should be a pretty slow week in terms of data. What's more interesting is the next week, when we get more important data like the February employment release."

Weighing on the market is expectation the Fed will enact at least a quarter of a percentage point interest rate hike when its rate-setting committee meets next on March 21.

The Fed has pushed rates up one full percentage point since June of last year but the moves have done little to slow demand and economic activity.

"People who have borrowed heavily to buy stock for the long term are going to discover that it is not written in the Bible that the stock market is going to go up each year," Charles Biderman, chief executive of TrimTabs.com, a company which tracks data on mutual fund flows and other indicators.