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Markets end week with a strong finish

Economic reports stoke investor enthusiasm and help markets edge up after a surprisingly strong week.

    Economic reports stoked investor enthusiasm and helped markets edge up after a surprisingly strong week.

    The Nasdaq composite index rose 27.98 to 4,234.33, and the Standard & Poor's 500 index gained 3.09 to 1,520.77.

    The Dow Jones industrial average rose 23.68 to close at 11,238.78 led by General Motors, which rose $2.94 to $72.94.

    The Dow and S&P finished only slightly higher from last week, while the Nasdaq rose nearly 5 percent. Since May 31, the Dow was up by nearly 7 percent, the S&P gained 6 percent, and the Nasdaq climbed 12 percent.

    "The markets will build on these gains once the big money comes back after Labor Day," said Bill Meehan, chief market analyst at Cantor Fitzgerald. Meehan said the Nasdaq could hit 4,500 in the coming months, but he was skeptical of Wall Street rumors putting the Nasdaq at or above 5,000 in the near future.

    Economists credited a raft of newly released statistics for the strong week. Several reports released today paint a picture of a cooling but healthy economy, warding off some investors' concerns that the economy was headed toward overheating.

    The nation's unemployment rate rose to 4.10 percent in August from 4 percent in July. Total nonfarm payrolls fell by a bigger-than-expected 105,000, the largest drop in nine years.

    The payroll drop reflected the layoff of 158,000 government census workers and a strike at Verizon, the nation's largest local phone company and wireless business. The government said private payrolls would have swelled by 102,000 excluding the strike.

    In a separate report, the National Association of Purchasing Managers said its index that measures manufacturing activity declined to 49.50 in August from 51.80 percent in July after 18 months of growth.

    "Demand growth in the economy is slowing," said Mickey Levy, chief economist at Banc of America Securities. "Businesses are trimming production and labor inputs to keep a lid on inventory building."

    Levy believes the private sector's efficient adjustment to decreasing demand translates into another quarter of strong productivity gains, a key statistic watched by the Federal Reserve in setting interest rate policy. Higher productivity means the economy can grow at a faster rate without intolerable inflation pressures.

    At the end of regular trading, Intel closed down 94 cents at $73.94, while Microsoft squeaked up 38 cents to $70.19. Computer makers Hewlett-Packard gained $4.63 to $125.25, while IBM closed up $1.59 at $133.63.

    The CNET tech index gained 11.62 to close at 3,386.50. Winners beat out losers, with 54 of the 97 stocks in the index rising, 41 falling and two remaining unchanged.

    Of the 18 sectors tracked by CNET Investor, Wireless companies posted the sharpest gains, rising about 5 percent. Semiconductor makers were the day's largest losers, falling nearly 2 percent.

    Viant was the biggest loser in percentage terms on the Nasdaq. The Internet consulting company bottomed out with a new 52-week low in midday trading today, a day after the company announced it would see revenues decline in the third quarter.

    Viant fell $5.69, or 41 percent, to close at $8.19 on a volume of 13 million shares, nearly 11 times the stock's average daily volume of 1.2 million. A stampede of analysts cut their ratings on the stock today.

    Viant?s warning also dragged down other consulting firms. Scient fell $5.13, or 19 percent, to $21.94. Sapient dropped $7.75, or almost 15 percent, to $44.75. Netopia closed down $9.25, or 25 percent, to $27.38.

    Among members of the CNET tech index, Lycos and Adaptec posted strong gains.

    Adaptec rose $2.31, or 9 percent, to $26.81, and Lycos gained $3.63 to $74.63 after Terra Networks SA, which is acquiring the Internet search company, rallied in Spanish trading.

    Global Crossing rose $4.94, or 16 percent, to $35 after the telecommunications company increased its forecast for 2000 sales based on results from its services, installation and maintenance businesses. Volume topped 26 million shares, making it the most active stock on the Nasdaq.

    Yahoo shares fell $8 to $113.50. The Wall Street Journal reported that some investors are concerned by a decline in the Internet portal's advertising revenue.

    The Philadelphia semiconductor index fell 10.41 to 1,142.57, led by chipmaker Altera, which lost $2.97 to close at $61.84.