Major stock indices got the jitters in late February over the short-term outlook for the US economy. But nanotechnology stocks, as measured by the Lux Research nanotech Index, held up quite well — and some companies had substantial gains.

Much of the general market concern is over a possible weakness in consumer demand if house prices in the United States continue to stagnate. But revenue for nanotechnology companies remains dominated by demand from businesses (in equipment and materials, for example), rather than from consumers, explains Peter Hébert, chief executive of New York-based Lux Research, which compiles the index. So the index has fared reasonably well, outperforming the high-tech Nasdaq index so far this year.

There has been no clear, general trend in the index over the past two months, but a few star stocks have performed well.

Arrowhead of Pasadena, California, for example, pleased its investors with several acquisitions, including that of Carbon Nanotechnologies, the carbon nanotubes company founded by late Nobel laureate Richard Smalley. Arrowhead's shares soared from US$3.75 in mid-March to $4.95 last week.

Los Angeles drug-delivery specialist Abraxis Bioscience, whose main product is a nanoparticle-borne breast-cancer drug Abraxane, also rose in value after announcing 2006 sales of $765 million, up from $520 million the previous year.

Hébert says that overall, confidence in the nanotechnology sector remains strong, and has been driven by growing global investment during 2006 — $6.4 billion in public research, $5.3 billion in corporate research and development and $650 million in venture capital.