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MARKET CLOSE: Semiconductor stocks lift Nasdaq to yet another record

Semiconductor and personal computer stocks ignited another rally in the technology sector Thursday, sending the Nasdaq composite up 41 points to another record close of 3,197.21. The Dow Jones industrial average closed off 2 points to 10,595.30.

Some positive comments from brokerage firms lifted the chip sector to record levels as analysts are expecting strong demand for the next year or two.

However, the blue-chip stocks lost ground as next week's Federal Reserve Board's policy meeting is making some traders nervous.

"My sense here is that there is some anxiety going on concerning the Fed meeting," said Joseph Barthel, the chief investment strategist at Fahnestock & Co. "My sense is that you had a rally prior to (the meeting) and now they're getting ready (for the hike)."

Merrill Lynch got the chip stocks started Thursday after it boosted its price targets on semiconductor makers, saying the current upswing in spending on computer chips has several more years to run.

Analog Devices Inc. (ADI) rose 5 1/2 to 64 1/2 while Appied Materials Inc. (AMAT) and LSI Logic Corp. (LSI) shot up 6 3/4 and 4 5/16 a share, respectively. Broadcom Corp. (BRCM) moved up 11 3/8 to 180 and Intel Corp. (INTC) tacked on 7/16 to 79 7/16.

Advanced Micro Devices Inc. (AMD) charged up 5 to 28 after company officials said it expects to break even in its first quarter. First Call consensus was expecting the chipmaker to lose 36 cents a share in the quarter.

Internet firewall firm, SonicWall (Nasdaq: SNWL) made an impressive debut as its shares rallied up 12 1/16 to 26 1/16.

The rest of the Internet sector wasn't as fortunate.

America Online Inc. (AOL) dropped 3 3/8 to 142 5/8 and Yahoo! Inc. (YHOO) lost 4 9/16 to 193 1/2. Lycos Inc. (LCOS) lost 1 to 56 5/16. Amazon.com Inc. (AMZN) gained 1 to 73 while Excite@Home Corp. (ATHM) and Infoseek Corp. (SEEK) shed 1 9/16 and 3/4 a share, respectively.

VeriSign, Inc. (Nasdaq: VRSN) rose 2 3/4 to 155 after it issued a 2-for-1 stock split Thursday and announced a deal with a Swedish telecom company.

Beyond.com Corp. (Nasdaq: BYND) lopped off 1 1/16 to 9 3/16 after the stock was downgraded to a "hold" from a "buy" by CS First Boston, citing the squeeze from Amazon.com's entry into the software space, and a recent management exodus.

Among widely held PC stocks, Dell Computer Corp. (DELL) closed up 2 to 43 7/16 ahead of its earnings report; Compaq Computer Corp. (CPQ) added 1/2 to 22 1/2; Gateway Inc. (GTW) moved up 7/16 to 76 5/16 and Apple Computer Inc. (AAPL) gained 13/16 to 92 1/4.

Time Warner Inc. (NYSE: TWX) closed up 7/8 to 68 9/16 after announcing its CNN News Group plans to buy a $20 million on a minority equity stake in InterVu Inc. (Nasdaq: ITVU). InterVu shares closed up 12 9/16 to 76 1/8.

Microsoft Corp. (MSFT) added 2 ? to 89 5/8 and Sun Microsystems Inc. (SUNW) shot up 1 9/16 to 114 3/4.