Internet and semiconductor stocks enjoyed strong gains Wednesday as the Nasdaq composite rallied up 168 points to a record close of 4,550.21. The Dow Jones industrial average fell 79 points to 10.225.73.
Investors were apparently relieved by more comments from Fed Chairman Alan Greenspan. While more interest-rate hikes appear inevitable, Greenspan went out of his way to point out the increases weren't directly targeting investors.
"We are not focusing monetary policy on the stock market,'' Greenspan said. "To the extent that it affects the economy, we respond to that, but ... we don't look at stock prices and say, 'They're rising, we have to raise interest rates.'"
The 168-point jump was a single-day record for the Nasdaq.
"The new money that comes to this market is going one place -- Nasdaq," said Scott Bleier, chief market strategist at Prime Charter Ltd.
America Online Inc. (AOL) gained 7 3/16 to 56 13/16 after Merrill Lynch issued a positive report on the online service provider. Yahoo! Inc. (YHOO) added 12 13/32 to 166 7/32 while Lycos Inc. (LCOS) and Amazon.com Inc. (AMZN) tacked on 2 5/16 and 6 7/8 a share, respectively.
Gateway Inc. (GTW) shot up 10 7/16 to 67 5/8 after the PC maker said it plans to expand its product lines and post annual sales of more than $30 billion by 2004. Apple Computer Inc. (AAPL) rose 2 7/16 to 116 1/4 and Compaq Computer Corp. (CPQ) trimmed 1/16 to 25 3/16. Dell Computer Corp. (DELL) marched up 1 9/16 to finish at 41 3/8.
Intel Corp. (INTC) picked up 2 5/16 to 109 1/16. Advanced Micro Devices Inc. (AMD) slid 3/4 to 41 1/16 and IBM Corp. (IBM) closed off 2 1/16 to 108 15/16.
On the IPO front, Nextel Partners (Nasdaq: NXTP), the only U.S. affiliate of wireless telephone company Nextel Communications, rallied up 10 1/8 to 30 1/8 in its debut.
Alcatel (NYSE: ALA) fell 4 1/8 to 43 5/8 after it agreed to buy Canadian network-equipment maker Newbridge Networks (NYSE: NN). Newbridge shares closed off 1 9/16 to 32 13/16.
Cisco Systems Inc. (CSCO) soared up 14 11/16 to 138 5/8 and Lucent Technologies Inc. (LU) clipped 1/16 to 52 11/16.
BEA Systems (Nasdaq: BEAS) closed up 1 1/18 to 139 after itbeat estimates, announced a stock split, and was talked up by analysts Wednesday.
ADC Telecom (Nasdaq: ADCT) lost 2 13/16 to 44 after it said it would buy Pairgain (Nasdaq: PAIR). The $1.6 billion deal would expand ADC's broadband network offerings. PairGain shares closed up 1 7/16 to 17 1/2.
Microsoft Corp. (MSFT) gained 7/16 to 94 1/4 and Oracle Corp. (ORCL) closed up 3 3/4 to 63 1/16.