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Tech Industry

MARKET CLOSE: Stocks take flight on homes, goods data

The Dow Jones industrial average shot up 171 points to 10,625.01 Wednesday as investors applauded a pair of encouraging economic reports. The Nasdaq composite tacked on 43 points to finish at 2,059.62.

In economic news, orders for big-ticket manufactured items jumped sharply in March, but the strength was confined to transportation-related goods. The Commerce Department reported Wednesday that durable goods orders rose 3 percent to $205.12 billion in the month, their largest gain since November of last year.

Data on new U.S. homes also indicated the economy wasn't doing too badly. Sales rose to a record rate in March, the government said Wednesday in a report suggesting the housing market is holding up well.

"If you're looking for argument that the consumer isn't falling out of bed, just look at housing sales, which have done extraordinary well," Ed Cimilluca, who helps oversee $250 million for ING Furman Selz, told Reuters. "But in terms of capital spending, a lot of tech companies have themselves a problem."

Further illustrating that problem, UBS Warburg analyst Nikos Theodosopoulos downgraded several networking equipment stocks Wednesday, saying U.S. telecommunications companies would continue to cut back on spending in 2001.

Companies cut from "buy" to "hold" recommendations were ADC Telecommunications (Nasdaq: ADCT), off 16 cents to $7.50, Avici (Nasdaq: AVCI), unchanged at $11.27, Cisco Systems (Nasdaq: CSCO), down 53 cents to $15.73 and Ciena (Nasdaq: CIEN), which gained 87 cents to finish at $57.54.

Nortel Networks (NYSE: NT) clipped 34 cents to $15.16 and Lucent Technologies (NYSE: LU) closed off 5 cents to $10.20.

Microsoft (Nasdaq: MSFT) moved up $2.14 to $69.69. Sun Microsystems (Nasdaq: SUNW) lost $1.03 to $16.05, and Oracle (Nasdaq: ORCL) picked up 26 cents to close at $17.23.

BMC Software (NYSE: BMC) shares lopped off $3.61 to $23.54 following its fourth-quarter earnings report. Though the company topped estimates, it lowered its outlook for the first quarter and full year.

The appointment of a new CFO couldn't do much for PurchasePro (Nasdaq: PPRO). Its shares fell $2.17 to $4.05 after an 11th-hour profit warning quashed high hopes for the first quarter.

America Online Time Warner (NYSE: AOL) rallied up $2.25 to $49.50. Yahoo (Nasdaq: YHOO) closed up 67 cents to $18.68, while Amazon.com (Nasdaq: AMZN) and CMGI (Nasdaq: CMGI) finished up 41 cents and 23 cents a share, respectively. eBay (Nasdaq: EBAY) jumped $3.84 to end at $48.40.

Online news site MarketWatch.com (Nasdaq: MKTW) posted a smaller-than-expected loss for the first quarter, but its revenue slipped along with demand for advertising. The stock inched up a penny a share to $2.75.

Among widely held PC issues, Dell (Nasdaq: DELL) scampered up $1.14 to $26.99, Compaq (NYSE: CPQ) gained 25 cents to $17.75, Gateway (NYSE: GTW) picked up 24 cents to $18.25 and Apple Computer (Nasdaq: AAPL) closed up 69 cents to $24.72.

Intel (Nasdaq: INTC) slid 14 cents to $29. Advanced Micro Devices (NYSE: AMD) shed 45 cents to $26.90, and IBM (NYSE: IBM) moved up $2.18 to finish at $114.85.

ZDII staff and Reuters contributed to this roundup.