Late-day rally hoists Nasdaq above 2,000
A surge in late-day buying brings the Nasdaq into positive territory after morning losses, enabling the index to close up for the second straight session.
The Nasdaq composite index picked up 38.64 points to close at 2,022.96, and the Dow Jones industrial average gained 49.96 to 10,455.63.
More layoffs from Hewlett-Packard, poor quarterly results and expectations from Compaq Computer Wednesday and some grim economic news had dragged technology stocks down earlier in the session, putting a stop to Wednesday's rally. But a surge in buying, led by gains in the semiconductor sector, brought the Nasdaq to a close above the 2,000 mark.
"A lot of people are under the impression that we are pretty close to a bottom. People are beginning to feel the worst is behind us," said Lance Zipper, managing director of equity trading at Brean Murray.
Semiconductor stocks led the gains, with CNET's Semiconductors index up more than 5 percent. Some of the biggest gainers on the index were Broadcom, up $4.07 to $43.10, National Semiconductor, up $3.18 to $30.08, and Cypress Semiconductor, up $3.79 to $26.38. Intel was up 36 cents to $29.78
The morning's economic news showed June durable goods orders were far lower than expected, indicating the economic downturn continues to slow orders for big-ticket items. Orders slid 2 percent in June to $184.11 billion, after a 2.7 percent rise in May, the Commerce Department said. Analysts expected orders to be down just 0.8 percent in June.
Initial jobless claims offered a slightly rosier picture. A report that measures the number of filings for state jobless benefits fell sharply last week, reaching the lowest level since March. The Labor Department said the number of claims fell by 51,000 to 366,000 in the week ended July 21 from a revised 417,000 claims reported a week earlier. Much of the decline was attributed to volatility typical of July, when auto plants and other factories temporarily shut down.
HP, down $1.68 to $24, said it will cut 6,000 jobs and lowered its revenue projections, citing the economic slowdown and weak spending on PCs. The computer maker also said it expects sales to drop 14 percent to 16 percent from a year ago in the quarter ending July 31.
Compaq also took a hit from slowing PC sales. The company reported second-quarter earnings and revenue Wednesday that were in line with lowered forecasts but were down sharply from last year. Shares were up 34 cents to $14.50 after falling earlier in the day.
CNET's PC Hardware index was one of the few indexes to end the day in negative territory, down half of a percent.