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Tech Industry

Chip stocks lead Nasdaq higher

After the markets drift along in light trading for most of the day, a late buying spree sends the Dow Jones industrial average and Nasdaq composite index sharply higher.

    After the markets drifted along in light trading for most of the day, a late buying spree sent the Dow Jones industrial average and Nasdaq composite index sharply higher.

    "Prices stabilized early and we just drifted higher on low volume," said Todd Clark, head of listed trading at WR Hambrecht

    Boosted by a sharp climb in the shares of many chipmakers, the Nasdaq rose 60.06 to 3,849.53, and the Standard & Poor's 500 index climbed 19.72 to 1,491.56.

    The Dow Jones industrial average rose 148.34 to close at 11,176.14.

    The Nasdaq generated a volume of 1.05 billion shares, its lowest volume for a full day of trading so far this year. The New York Stock Exchange also traded on a light volume of about 782 million shares.

    "Low-volume days are typical in the summer, as everyone tries to stretch out the weekend," Clark said.

    The Nasdaq and the S&P 500 ended last week nearly unchanged, while the Dow climbed 2 percent. Today's close marks the indexes' highest level since mid-April.

    At the end of regular trading, Intel closed up $3.13 at $66.94, and Microsoft slipped 25 cents to $72.19.

    The CNET tech index climbed 63.19 to close at 3,146.44 . Losers edged out winners, with 85 of the 97 stocks in the index falling, 18 rising and four remaining unchanged.

    Of the 18 sectors tracked by CNET Investor, semiconductor equipment companies posted huge gains, rising 7 percent. Computer network equipment makers were the day's only losers, falling a slim 0.12 percent.

    The Philadelphia semiconductor index rose 73.50, or about 8 percent, to 1,027.19, led by chip equipment maker Novellus, which gained $7.06, or nearly 16 percent, to close at $51.44.

    "My sense is that some stocks just got to an oversold position," said analyst Mark Fitzgerald of Banc of America Securities. "Valuations got extremely low, and there were some stocks trading in single digit (price-to-earnings ratios) on next year's (expected) earnings."

    Other chip stocks also had a big day. Chipmaker Advanced Micro Devices rose $5.25, or 9 percent, to $63, while Texas Instruments moved up $6.50, or 11 percent, to $63.75. Chip equipment maker Applied Materials gained $5.63 to $74.81, and KLA-Tencor climbed $6.31, or 14 percent, to $51.

    Among members of the CNET tech index, shares of Dell Computer stayed busy, and Broadcom posted gains.

    Dell traded slightly lower on heavy volume after taking a beating last week following its earnings report. Shares of the direct PC seller fell $1 to $36.69 on a volume of 45.8 million shares, making it the most actively traded stock on the Nasdaq.

    Shares of chipmaker Broadcom rose $15.69 to $240.75 after the company announced that it would buy privately held NewPort Communications for $1.24 billion in stock to gain products for fiber-optic equipment makers.

    CommScope hit a new 52-week low today after the maker of fiber-optic and other communications cables said third-quarter earnings likely will miss estimates because sales have been weaker than expected.

    The company's shares recovered and rose 75 cents to $26.19 but traded as low as $22.63, less than half their 52-week high of $50.12. Volume topped 4.6 million shares, more than eight times the stock's average daily volume of about 536,000 shares.

    iXL Enterprises reached a new low today. The e-commerce software maker fell $1.31, or 11 percent, to $10.63 and traded as low as $10.50 compared with its high of $58.75.

    Investors continued to pummel shares of SpeechWorks International. The Boston-based company said Friday that its second-quarter loss, excluding one-time charges, widened to 29 cents a share from a loss of 15 cents a share a year earlier.

    The software maker, which went public Aug. 1, fell $11.56, or 15 percent, to $63.94.

    Kana Communications continued to rise after the software developer said today that it will provide Cisco Systems with communications-management software for Cisco's customer service. Kana rose $2.19 to $35.13, and Cisco rose 19 cents to $64.50.