The Nasdaq composite index rose 95.63 to 3,429.02, and the Standard & Poor's 500 index climbed 7.10 to 1,428.32.
The Dow Jones industrial average fell 18.96 to 10,880.51 led by Alcoa, which lost $1.31 to $27.75.
Intel said fourth-quarter sales are on track with forecasts. Last month, the Santa Clara, Calif.-based company said fourth-quarter revenue would rise 4 percent to 8 percent from the third quarter's $8.73 billion. Intel shares rose $1.81 to $46.69.
Xilinx, a maker of programmable computer chips, said it remains on track for 12 percent growth this quarter from last quarter. The company's shares sank almost 7 percent Wednesday after rival Altera said fourth-quarter sales will be on the low end of its forecast. Shares of Xilinx rose $2.31 Thursday to $69.75.
The overall chip sector responded positively to the news. The Philadelphia semiconductor index rose 18.72, or nearly 3 percent, to 732.72.
Some analysts believe the tech run-up was caused more by excess cash than any fundamental news. "There's a lot of liquidity in the hands of portfolio managers," said Bill Meehan, chief market analyst at Cantor Fitzgerald.
Meehan said fund managers sold many positions recently to generate funds to pay taxes, since the fiscal year for many funds ends in October. The selling also left a lot of cash on the sidelines, which had to be reinvested, and Meehan thinks fund managers will now defend their investments in technology.
Investors also had some key economic data to mull over. The Labor Department said third-quarter productivity rose 3.8 percent from the previous quarter, a significant slowdown from last quarter's 6.1 percent jump.
Unit labor costs increased 2.5 percent in the third quarter from the previous quarter. In the second quarter, labor costs held at a revised zero percent.
While a fall in productivity and a rise in labor costs generally increases the risk of future inflationary pressure--something the Federal Reserve has tried to counteract on several occasions, raising interest rates six times since June 1999--most analysts and economists are not overly concerned.
"(Productivity) continues to grow at a strong pace, but just at a slower pace," said Mickey Levy, chief economist at Banc of America Securities.
Levy noted that productivity increased 5 percent from the third quarter of 1999, and non-farm unit labor costs advanced just 0.1 percent from a year ago. While these numbers look good, Levy also noted that corporate profit margins will be squeezed if productivity falls and costs increase.
Meehan agrees and had a more negative view of the economy. "One of two things can happen: you have significant pressure on profit margins or an inflation problem," he said.
The CNET tech index climbed 57.10 to 2,713.55. Advancers led decliners, with 78 of the 97 stocks in the index rising, 17 falling and two remaining unchanged.
Of the 18 sectors tracked by CNET Investor, Internet e-tailers posted the sharpest gains, rising 6 percent. Wireless companies were one of the day's two losing sectors, dropping nearly 6 percent.
Vodafone Group took a big hit in the wireless sector, falling $3.63, or about 9 percent, to $36.75, and Sprint PCS dropped 44 cents to $36.56.
Shares of Oracle and WorldCom had a busy day. Shares of WorldCom fell $1.38 to $17.56 on a volume of more than 154 million shares, more than four times its average daily volume of about 36 million shares, making it the most active stock on the Nasdaq.
The long-distance phone company lowered its fourth-quarter forecasts and 2001 profit and revenue growth expectations Wednesday because of higher costs and lower phone prices.
Oracle fell $1.81 to $29.56, but was off as much as $4.13 earlier in the day. Volume topped 149 million shares, nearly 6 times more than the stock's average daily volume of 26.3 million shares.
Rumors that chief financial officer Jeffrey Henley planned to resign sent the stock lower, although Oracle flatly denied the speculation.
ADC Telecommunications rose $2.19, or about 10 percent, to $24.38. The maker of telephone equipment said it expects to meet or beat earnings estimates for the fourth quarter.
But the earnings news was not all good for the tech sector.
PSINet said fourth-quarter results will be lower than forecast. In addition, president and chief operating officer Harold Wills resigned. Shares of the Internet service provider fell $3.80, or 56 percent, to $2.94, making it the largest percentage loser on the Nasdaq. Volume topped 92.3 million shares, more than 19 times the stock's average daily volume of 4.8 million shares.
Shares of Netopia fell $2.25, or almost 20 percent, to $9.19 after the company reported lower-than-expected earnings after the markets closed Wednesday.
Excluding certain charges, Netopia said it earned a pro forma income of $801,000, or 4 cents per share, on revenue of $23.6 million. In the same quarter a year ago, the maker of Internet access equipment lost $174,000, or 1 cent a share, on sales of $13.5 million.
Wall Street expected the company to earn 17 cents a share for the quarter, the consensus estimate of eight analysts surveyed by First Call/Thomson Financial.