Strong earnings from the likes of Apple and IBM pushed the Nasdaq composite up 38 points to another record close of 4,189.50 Thursday while the Dow Jones industrial average fell 138 points to finish at 11,351.30.
Traders were put off by a report that the trade deficit surged to a record $26.5 billion in November, as demand for imports outpaced exports. Also, the number of Americans filing new claims for unemployment benefits also dropped a dramatic 39,000 from the week before to 272,000 for the week ended Jan. 15.
With a crucial Federal Reserve Board meeting looming in early February, investors are hedging their bets.
"There's a big tug of war between earnings reports and interest rates," said Bill Meehan, the chief market analyst at Cantor Fitzgerald.
Apple (Nasdaq: AAPL) shot up 6 15/16 to 113 1/2 after it beat estimates in its fiscal first quarter. Dell Computer Corp. (DELL) gained 1 1/4 to 43 3/4 while Compaq Computer Corp. (CPQ) and Gateway Inc. (GTW) closed up 5/8 and 4 1/8 a share, respectively.
Advanced Micro Devices Inc. (AMD) fell 2 7/8 to 38 1/8 even though the chipmaker beat Street estimates by 42 cents a share. IBM Corp. (IBM) rose 2 3/8 to 121 7/8 after topping estimates in its latest quarter.
Lattice Semiconductor (Nasdaq: LSCC) closed up 6 1/2 to 59 15/16 after it reported third quarter operating earnings of $21.6 million, or 42 cents a share, on sales of $115 million. First Call consensus called for a loss of 37 cents a share.
Adaptec (Nasdaq: ADPT) rose 5/8 to 59 7/8 after it said net income for the third quarter of fiscal 2000 was 52 cents a share, beating First Call's estimate of 48 cents a share.
Legato Systems (Nasdaq: LGTO) wasn't so lucky. The stock plunged 23 7/8 to 29 3/4 after the company missed estimates because it changed its revenue recognition policy.
Yahoo! Inc. (YHOO) shed 12 1/16 to 351 15/16. America Online Inc. (AOL) shaved off 11/16 to 64 3/16 after beating estimates in its latest quarter. Lycos Inc. (LCOS) and Amazon.com Inc. (AMZN) closed off 1 15/16 and 2 1/16 a share, respectively.
Ciena (Nasdaq: CIEN) rallied up 5 3/16 to 73 7/16 after it announced a deal with Global Crossing (Nasdaq: GBLX) to supply intelligent optical transport products for its network. Global Crossing shares gained 1 1/16 to 53 5/16.
Engage (Nasdaq: ENGA) closed up 20 9/16 to 97 9/16 after it said it would acquire Adsmart and Flycast from its majority owner, venture capital company CMGI Inc (Nasdaq: CMGI), in an all-stock deal.
Microsoft Corp. (MSFT) closed off 1 to 106 while Oracle Corp. (ORCL) and Sun Microsystems Inc. (SUNW) gained 2 1/8 and 3 5/8 a share, respectively.