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HolidayBuyer's Guide
Tech Industry

MARKET CLOSE: Reversal of fortune: techs get hot

Technology stocks recovered much of the ground they lost earlier this week, sending the Nasdaq composite up 43 points to within a few points of its all-time high. The Dow also tacked on 43 points to close at 11,079.40.

The irony of Thursday's rally is that oil prices surged to a two-year high and the U.S. dollar fell to a three-year low against the Japanese yen. Despite these inflationary signs, technology stocks, particularly Internet offerings, took off.

Investors also got a some news on the employment front. The number of Americans filing new claims for state jobless benefits fell by a slim 4,000 in early September, under the key 300,000 mark for a seventh consecutive week. The Labor Department also said claims slipped to 286,000 in the week ended Sept. 4 from a slight upward revision to 290,000 in the prior week.

"Volatility is here to stay," said Alan Ackerman, senior vice president and market strategist at Fahnestock and Co. "Any disappointing number is sure to bring volatility, vulnerability and vexation."

There was little disconcerting news from the Internet sector Thursday.

Yahoo! (YHOO) rose 9 1/4 to 162 11/16 Thursday after a number of analysts upgraded the stock. One analyst cited increasing ad rates for its bullish outlook on the leading Internet portal. CIBC World Markets also put a strong buy rating on Yahoo!, as it started coverage on shares of Internet companies.

eBay Inc.(EBAY) closed up 9 11/16 to 144 7/16 and America Online Inc. (AOL) moved up 2 1/8 to 96 1/8 after they received "strong buy" ratings. Amazon.com Inc. (AMZN) marched up 2 3/16 to 63 5/8.

Excite@Home Corp. (ATHM) rose 1 3/4 to 40 while Lycos Inc. (LCOS) and Infoseek Corp. (SEEK) tacked on 1 and 1/2 a share, respectively.

1-800-Flowers.com (FLWS)'s fourth-quarter loss of $3.4 million, or 8 cents a share, scraped by First Call estimates by a penny, but still failed to get the stock above its offering price of $21. It closed off 2 1/2 to 17 1/8.

Electronic Data Systems Corp. (EDS) picked up 5/8 to 58 5/8 after announcing it would reorganize along a handful of service lines instead of a score of industrial categories, seeking to stoke the lackluster growth of the world's No. 2 computer services supplier.

Electronic commerce software maker Unify Corp. (UNFY), which shot up 3 1/8 to 19 7/8 after extending a pact with Red Hat Inc (Nasdaq: RHAT) by certifying two new Internet products to run on Red Hat's latest distribution of Linux.

Dell Computer Corp. (DELL) jumped 1 1/4 to 48 7/8 while Gateway Inc. (GTW) and Compaq Computer Corp. (CPQ) rose 5/16 and 3/16 a share, respectively. Apple Computer Inc. (AAPL) gained 1 1/16 to 75 9/16 and International Business Machines Corp. (IBM) stormed up 4 1/4 to 135.

Microsoft Corp. (MSFT) picked up 1 13/16 to 94 1/16. Oracle Corp. (ORCL) shaved off 1/4 to 44 1/16 and Sun Microsystems Inc. (SUNW) lost 1 1/4 to end at 84 3/16.