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Tech stocks ride market rally

Tech stocks post strong gains as the broader markets react favorably to an expected quarter-point hike in interest rates.

Tech stocks posted strong gains as the broader markets reacted favorably to an expected quarter-point hike in interest rates.

The Nasdaq composite index gained 101.68 to 4,711.68, and the Standard & Poor's 500 index added 37.24 to 1,493.87. The Dow Jones industrial average climbed 227.10 to close at 10,907.34.

The CNET tech index surged 101.91, or 3 percent, to close at 3,397.78, led by shares of Yahoo and Amazon.com.

Winners beat losers, with 73 of the 100 stocks in the index rising, 23 falling and four remaining unchanged.

Of the 18 sectors tracked, server hardware makers and e-tailers posted the sharpest gains, rising about 6 percent and 5 percent, respectively. Computer-aided design/manufacturing companies were the day's largest losers, slipping a slim 0.6 percent.

Microsoft gained $5.38 to $102.75, while Intel closed up $3.44 at $138.44, making them the first and fourth most active stocks on the Nasdaq in terms of share volume.

The initial public offering of Linux software developer Caldera Systems was the biggest percentage gainer on the Nasdaq. The shares jumped $15.44, or 111 percent, to $29.44. Volume topped 15.5 million shares.

Among members of the CNET tech index, Yahoo and Amazon posted strong gains.

Yahoo rose $19.72, or 11 percent, to $191.75. The company announced today that it will begin offering instant messaging and email services on Palm Computing's popular handheld devices.

Amazon rose $8.19, or 12 percent, to $72.38. The e-tailing giant has enlisted online convenience store Kozmo.com to deliver certain items to customers within an hour of ordering. Kozmo today filed for an IPO that it hopes will raise $150 million.

3Com fell $4.47, or 6 percent, to $64.09. The company's decision to give up its high-end networking business should result in a financial boon for its competition.

The Philadelphia semiconductor index fell 8.96 to 1,194.49, led by chip designer Rambus, which lost $50.47, or 15 percent, to close at $266.56. The industry continues to contemplate the use of the company's memory technology.

Search engine company AltaVista said it is licensing its technology to software maker Ariba to ease searches of business-to-business e-commerce databases. CMGI, which owns a majority stake in the search engine, rose $9.75 to $124, while Ariba fell $8.19 to $240.75.