Winners and losers were balanced, with 52 of the 100 stocks in the index rising, 45 declining and 3 remaining unchanged.
Of the 18 sectors tracked, semiconductor capital equipment companies posted the sharpest gains, rising 3 percent. Server software companies were the day's largest losers, dropping almost 4 percent.
In the broader markets, the Nasdaq composite index gained 1.76 to 5,048.62, and the Standard & Poor's 500 index dropped 6.62 to 1,395.07. The Dow Jones industrial average fell 81.91 to 9,928.82.
For the week, the Nasdaq gained 2.7 percent, the S&P 500 dipped about 1 percent, and the Dow lost about 4 percent. So far this year, the Nasdaq is up 24 percent, while the Dow has declined 13 percent.
Intel closed up $1.81 at $120.19; Microsoft edged up $1 to $101. Microsoft announced that it will use Intel chips in its TV gaming consoles.
The initial public offering of Selectica, an Internet software company, showed the biggest percentage gains on the Nasdaq. The shares jumped $102.23, or 262 percent, to $141.23. Volume topped 7.6 million shares.
Among members of the CNET tech index, Motorola and eBay posted strong gains.
Motorola rose $8.06 to $172.06 as analysts from Merrill Lynch and Warburg Dillon Read reiterated "buy" ratings on the stock.
eBay rose $10.75 to $193.25 on reports that the company would seek business alliances with package shippers such as United Parcel Service and Federal Express.
Qwest and AMD lost the most in the CNET tech index. Qwest fell $7.31, or 12 percent, to $52.69 after merger talks with Deutsche Telekom fell through yesterday.
Chipmaker AMD fell $2.25 to $55.88 on news that Microsoft chose rival Intel to supply chips for its X-Box.
The Philadelphia semiconductor index rose 42.52, or 3 percent, to 1,332.73 as chip designer Rambus rose $41.56, or 10 percent, to an all time high of $421.00 on news of a 4-for-1 stock split.
National Semiconductor was the index's largest loser--falling $9 to $70--despite posting earnings yesterday of 51 cents a share for the third quarter, compared with a loss of 16 cents a share from the year-ago quarter. Analysts surveyed by First Call/Thomson Financial expected earnings of 45 cents a share.