Tech Industry

MARKET CLOSE: Employment data sets off frantic rally

More people were out of work in May than April and that was the best thing investors have heard in months. Technology stocks led a ferocious rally on Wall Street Friday, sending the Nasdaq composite soaring up 231 points to 3,813.33.

The Dow Jones industrial average shot up 143 points to close at 10,794.76.

Why all the optimism?

The Labor Department said unemployment rose to 4.1 percent in May from a 30-year low of 3.9 percent in April, while hourly wages rose only 0.1 percent, and there were only 231,000 new jobs created in May.

"The point is that these numbers are very soft and very encouraging. They suggest that the economy has slowed from the 5.4 percent pace of the first quarter to closer to 3 percent in the second quarter,'' said Hugh Johnson, chief investment officer at First Albany Corp. "They raise doubts or questions about whether the Federal Reserve will raise interest rates by one-quarter percent in June."

Internet stocks, dormant for months, stormed back Friday.

Yahoo! Inc. (YHOO) rolled up 14 7/16 to 134 1/2. America Online Inc. (AOL) picked up 4 1/8 to 57 1/4 while Amazon.com Inc. (AMZN) and eBay Inc. (EBAY) shot up 7 11/16 and 9 13/16 a share, respectively.

JDS Uniphase (JDSU) gained 12 1/8 to 110 3/8 and Ciena Corp. (CIEN) moved up 8 1/8 to 138 5/16. SDL Inc. (SDLI) closed up 10 11/16 to 260 3/8.

Chinadotcom (Nasdaq: CHINA) picked up 4 1/16 to 27 7/8 after analysts said the company was more than just a Chinese-language portal.

Despite the bullish nature of the rally, Exult Inc. (EXLT) only managed to break even in its initial public offering, closing unchanged at $10.

Cisco Systems Inc. (CSCO) resumed its leadership position, gaining 3 7/16 to 64 3/8. Nortel Networks (NT) added 2 5/8 to 60 1/8 while Lucent Technologies (LU) and 3Com Corp. (COMS) moved up 3 and 1 7/16 a share, respectively.

Microsoft (MSFT) rose 1 3/4 to 66 5/16. Sun Microsystems (SUNW) tacked on 5 5/16 to 88 and Oracle Corp. (ORCL) closed up 2 5/16 to 80 3/16.

Chip stock remained steady as Intel (INTC) charged up 4 1/2 to 134 3/16 and Broadcom (BRCM) soared up 19 13/16 to 164 7/16. Advanced Micro Devices (AMD) gained 5 3/4 to 89 3/4.

Among widely held PC stocks, Dell Computer (DELL) moved up 1/4 to 43 3/8; Apple Computer Inc. (AAPL) gained 3 7/16 to 92 9/16; Compaq Computer Corp. (CPQ) picked up 7/8 to 26 7/8 and Gateway Inc. (GTW) closed up 5 15/16 to 54 15/16. >