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MARKET CLOSE: Employment data sparks tech rally

Technology stocks made strong gains Friday as the Nasdaq composite stormed up 162 points to 2,914.90. The Dow Jones industrial average added 96 points to end at 10,712.91.

The gains come on the heels of profit warnings from major chipmakers such as Intel (Nasdaq: INTC) and Lattice Semiconductor (Nasdaq: LSCC) after Thursday's bell.

Investors were more interested in the Labor Department's report that job growth remained weak in November for the second straight month, helping the unemployment rate edge up to 4.0 percent. It was the first increase in the jobless rate since August.

Some traders believe this data combined with slumping U.S. stocks might compel the Federal Reserve Board to cut interest rates.

Others aren't so sure.

"This morning's jobs figures are by no means a smoking gun for the Fed," said Richard Berner, chief U.S. economist at Morgan Stanley Dean Witter in New York. "They don't give the Fed a clarion call to ease."

Complicating matters, the Florida Supreme Court sided with Al Gore in his latest legal action contesting the authorization of the state's election. That dampened some of the enthusiasm at the closing bell.

Intel shot up $1.63 to $33.88 despite its warning that fourth-quarter sales will be flat from the prior quarter.

Advanced Micro Devices (AMD) moved up $1.50 to $16 while Atmel (ATML) and Lattice (LSCC), which also warned, gained $2.94 and $3.25 a share, respectively.

Among widely held PC stocks, Dell (DELL) moved up 81 cents to $18.25; Gateway (GTW) inched up 35 cents to $17.50; Apple Computer (AAPL) picked up 75 cents to $15.06 and Compaq Computer (CPQ) closed up 15 cents to $19.50.

Ask Jeeves (ASKJ) tumbled $5.88 to $3.81 after it warned of a wider loss this quarter and announced that CEO Rob Wrubel will step down.

Yahoo! (YHOO) shares gained 44 cents to $35.38. America Online (AOL) tacked on $3.35 to $46.90 while Amazon.com (AMZN) and eBay (EBAY) picked up $2.06 and $3.63 a share, respectively. CMGI (CMGI) closed up $1.13 to $11.94.

Quantum Hard Disk Drive Group (NYSE: HDD) added 50 cents to $9.38 after it said it will miss revenue estimates for its fiscal third-quarter, because of a manufacturing component issue affecting its desktop drive business.

Fiber optic gear maker Ciena (Nasdaq: CIEN) rallied up $18.50 to $114.13 on a flood of positive analyst reaction, a day after the company topped estimates for its fourth quarter.

Microsoft (MSFT) jumped $1.31 to $54.44. Oracle (ORCL), which reports next week, gained $1.75 to $30.06 and Sun Microsystems (SUNW) closed off $3.88 to $38.94.

Among major network-equipment vendors, Cisco Systems (CSCO) rose $2.44 to $52.38; Nortel Networks (NT) picked up $4.44 to $42.94 and Lucent Technologies (LU) closed up 88 cents to $15.44.