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MARKET CLOSE: Dow hits new high; techs catch fire

Internet and telecommunications stocks carried the technology sector higher Thursday as the Nasdaq composite charged up 107 points to 3,956.93. The Dow Jones industrial average closed up 31 points to a record high of 11,582.43.

Investors were pleasantly surprised by some relatively benign economic news.

The Produce Price Index for December matched average forecasts, though strong December retail sales caused concerned among market strategists.

"These numbers fit into the scenario that keeps the Fed at 25 basis points at its next meeting. Inflation at the wholesale level is in line," said Alan Ackerman, the senior vice president and market strategist for Fahnestock & Co.

Analysts said investors were a bit hesitant to take any major positions ahead of Federal Reserve Chairman Alan Greenspan's speech to the Economic Club of New York Thursday night.

America Online Inc. (AOL) shares moved up 4 5/16 to 64 3/8 after retreating a bit after announcing its merger plans with Time Warner (TWX). Yahoo! Inc. (YHOO) fell 10 11/16 to 346 7/8 while Lycos Inc. (LCOS) and Excite@Home Corp. (ATHM) added 4 15/16 and 6 15/16 a share, respectively.

Amazon.com Inc. (AMZN) rose 2 3/8 to 65 15/16 and eBay Inc. (EBAY) closed up 7 7/16 to 137 13/16.

NBC Internet Inc. (Nasdaq: NBCI) shot up 1 3/4 to 77 1/2 after the online arm of General Electric Co.'s (NYSE: GE)'s NBC television network, said it plans to form a joint venture with Asiacontent.com Ltd. to create a Web gateway targeted at Pacific Rim countries.

Cisco Systems Inc. (CSCO) added 2 3/8 to 106 3/16. 3Com Corp. (COMS) fell 1/2 to 43 15/16 while Nortel Networks (NT) and Lucent Technologies Inc. (LU) closed up 2 1/8 and 1/2 a share, respectively.

Intel Corp. (Nasdaq: INTC) closed off 3/16 to 91 1/16 after rising all week in anticipation of the good quarterly results. Intel reports after the bell. Advanced Micro Devices (NYSE: AMD) sawed off 3/4 to 35 1/2 even though ING Barings analyst Peter Wolff started coverage of the chipmaker with a "strong buy" rating.

Chip-equipment maker KLA-Tencor (Nasdaq: KLAC) gained 9/16 to 119 3/4 after it reported second quarter earnings of 52 cents a share on sales of $331 million. First Call expected a profit of 48 cents a share.

Etec Systems (Nasdaq: ETEC) stormed up 25 15/16 to 75 13/16 after Applied Materials (Nasdaq: AMAT) announced plans to buy Etec. Applied shares finished off 2 9/16 to 124 1/2.

Solectron Corp. (NYSE: SLR) jumped 1 9/16 to 85 7/16 after it announced a 2-for-1 stock split and Merrill Lynch reiterated a "buy" rating.

Microsoft Corp. (MSFT) added 2 to 107 13/16 in heavy trading. Oracle Corp. (ORCL) trimmed 3/8 to 105 ? and Sun Microsystems Inc. (SUNW) shot up 2 7/8 to 77 1/4.

Rational Software (Nasdaq: RATL)gained 5 1/16 to 56 5/8 after it reported strong quarterly results, and CS First Boston upped its target on the stock to $71 from $52.

Apple Computer Corp (Nasdaq: AAPL) rallied up 9 9/16 to 96 3/4 Thursday after it got an upgrade from two analysts. Dell Computer Corp. (DELL) moved up 1 3/16 to 43. Gateway Inc. (GTW) added 1 to 59 1/2 and Compaq Computer Corp. (CPQ) closed unchanged at 29 5/8.