Investors snapped up semiconductor and network-equipment shares Monday, pushing the Nasdaq composite up 98 points to 3,958.49. The Dow Jones industrial average closed up 78 points to 10,811.78.
"There are a lot of people concerned about what the Federal Reserve is going to do about interest rates and they believe the best place to be is in the fastest-growing sector, which is technology," said Bill Meehan, chief market analyst at Cantor Fitzgerald. "Technology stocks rallied in the face of unfriendly economic numbers last week so there seems to be some momentum continuing here."
Microsoft Corp. (MSFT) shares charged up 3 11/16 to 73 7/16 as investors disregarded the government's proposal to split the software company into two units. Competitors on the Linux platform, RedHat (Nasdaq: RHAT) and Corel (Nasdaq: CORL) closed up 2 13/16 and 1 11/32 a share, respectively.
In economic news, the National Association of Purchasing Management said its index of manufacturing activity slipped to 54.9 percent in April, weaker than the 55.5 percent expected by analysts surveyed by Briefing.com. The government also said construction spending surged in 1.4 percent in March.
Network-equipment stocks enjoyed fine gains Monday as Cisco Systems Inc. (CSCO) closed up 2 1/8 to 71 7/16. Nortel Networks (NT) gained 6 3/4 to 118 3/4 while Lucent Technologies Inc. (LU) and 3Com Corp. (COMS) closed up 1 3/16 and 4 3/16 a share, respectively.
MP3.com (Nasdaq: MPPP) gained 1 13/32 to 8 13/32 after falling almost 40 percent Friday when a judge ruled the company had infringed on copyright.
Safeguard Scientifics (NYSE: SFE) picked up 7 1/8 to 49 1/4 after it announced it had raised $50 million each from Compaq and IBM and formed strategic relationships with both companies.
Compaq (CPQ) shares closed off 3/16 to 29 5/16. Dell Computer Corp. (DELL) gained 15/16 to 51 1/16 and Apple Computer Inc. (AAPL) finished up 1/4 to 124 5/16. Gateway Inc. (GTW) tacked on 11/16 to 56 and IBM (IBM) ended up 3/8 to 111 7/8.
Among widely held Internet issues, Yahoo! Inc. (YHOO) moved up 5/8 to 130 7/8; America Online Inc. (AOL) trimmed 1/4 to 59 3/4; Lycos Inc. (LCOS) lost 3/4 to 45 3/4; Amazon.com Inc. (AMZN) shot up 4 3/4 to 59 15/16 and eBay Inc. (EBAY) fell 3 9/16 to 155 5/8.
Homestore.com (Nasdaq: HOMS) scurried up 4 5/8 to 22 7/8 after it inked a five-year deal valued at more than $200 million to become AOL's leading provider of real estate listings.
Excalibur Technologies (Nasdaq: EXCA) said it will form a new interactive media services company with Intel, which is investing $150 million for a 60 percent stake in the venture. Excalibur shares finished off 1 5/8 to 33 7/8 while Intel (INTC) closed up 5/16 to 127 1/8.