MARKET CLOSE: Dow, techs soar despite rate hike

Investors went on a spending spree Tuesday even though the Federal Reserve Board raised short-term interest rates and adopted a "neutral" bias. Tech stocks were the story again as the Nasdaq composite rocketed up 74 points to a record close of 3,293.07.

The Dow Jones industrial average shot up 172 points to 10,932.33 and the S&P 500 hit an all-time record of 1,420.03.

All this optimism comes after the Fed raised interest rates for third time this year, up one-quarter of a percent to 5.50 percent.

But this hike was expected and the Fed's decision to change from a "tightening" bias to "neutral" gave investors good reason to put the interest-rate watch behind them.

"Now we have symmetry -- we had three tightenings, we had three easings," said Arthur Hogan, chief market analyst at Jefferies & Co. "It's behind us, we can move on and start to focus on earnings-growth potential and I think that's a positive for the marketplace."

Winners were found everywhere Tuesday.

America Online Inc. (AOL) shot up 7 11/16 to 159 1/8. Yahoo! Inc. (YHOO) rose 7 9/16 to 212 9/16 while Amazon.com and Excite@Home Corp. (ATHM) gained 5 7/16 and 1 1/8 a share, respectively. Lycos Inc. (LCOS) fell 1 15/16 to 57 15/16 after meeting Street estimates in its latest quarter. Infoseek Corp. (SEEK) picked up 13/16 to 34 7/8.

On the IPO front, Quintus (QNTS), a maker of e-commerce customer relationship software, opened at 43 1/2 and rocketed up 37 to 55 in its debut.

Juniper Networks, Inc. (JNPR) moved up 45 to 328 1/2 after splitting its stock 3-for-1.

China's landmark trade pact with Washington was sending China.com shares (CHINA) into orbit. The stock closed up 25 13/16 to 127. The pact, which would allow U.S. firms to invest in Chinese Internet companies, reversing a ban imposed just two months ago may yet encounter problems.

Among the day's deals, Emusic.com Inc. (EMUS) trimmed 1/16 to 11 7/16 after it said it will buy privately held Cductive.com in a stock-for-stock transaction worth about $38 million. E.piphany Inc. (EPNY), a supplier of Internet customer management software, gained 45 1/4 to 157 3/4 after it said it would buy RightPoint Corp.

Intel Corp. (INTC) rose 2 1/2 to 76 9/16. Advanced Micro Devices Inc. (AMD) inched up 3/16 to 25 3/4 and International Business Machines Corp. (IBM) closed up 7/16 to 94 1/2.

Among widely held PC stocks, Dell Computer Corp. (DELL) hustled up 7/8 to 41 11/16; Compaq Computer Corp. (CPQ) added 1/8 to 21 11/16; Gateway Inc. (GTW) fell 1/8 to 82 3/8 and Apple Computer Inc. (AAPL) closed up 1 3/4 to 91 3/16.

Microsoft Corp. (MSFT) tacked on 5/16 to 87 5/16. Oracle Corp. (ORCL) inched up 3/16 to 64 1/4 and Sun Microsystems Inc. (SUNW) stormed up 7 1/8 to 126 5/8.

It wasn't all good news, however.

Network processor maker MMC Networks (MMCN) shares plunged 3 to 19 after analysts downgraded it following a fourth quarter profit warning.

Cisco Systems Inc. (CSCO) shot up 1 11/16 to 84 1/2 while Lucent Technologies Inc. (LU) and 3Com Corp. (COMS) closed up 3 5/16 and 1 1/8 a share, respectively.