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Tech Industry

MARKET CLOSE: Tech stocks move higher despite Cisco woes

Technology stocks battled back into the black Tuesday as the Nasdaq composite moved up 14 points to finish at 1,923.16.

The Dow Jones industrial average rallied back from a triple-digit deficit in early trading to finish up 58 points at 10,216.86.

Economic news indicated that the U.S. economy is still chugging along. The closely watched Consumer Price Index, a measure of inflation, rose 0.1 percent in March, in line with analysts' expectations and below a 0.3 percent jump in February.

A report on U.S. industrial production also signaled a relatively strong economy. U.S. industrial output rose 0.4 percent in March, according to a Federal Reserve report, compared with a 0.4-percent dip in February. Analysts had expected output to fall by 0.2 percent.

Though the data indicated that the economy was relatively stable, it left investors unsure of how the Federal Reserve might respond with changes to interest rates.

"It's good news the market was able to recover, but we still have a lot of earnings reports to get through," Charles Reinhard, senior investment strategist at Lehman Brothers told Reuters. "By the end of this week, half of the companies of the Dow will have reported earnings, and investors will have a better idea of what is ahead."

Shares of Cisco Systems (Nasdaq: CSCO) trimmed 55 cents to $16.65 Tuesday after the company warned on Monday evening that it would miss third-quarter estimates. Although Cisco said it would eventually recover from a slowing economy, analysts debated whether it would ever regain its former glory.

Among other network-equipment vendors, Nortel Networks (NYSE: NT) lost 6 cents to $15.19, Lucent Technologies (NYSE: LU) shed 25 cents to $7.15 and 3Com (Nasdaq: COMS) added 34 cents to finish at $4.89.

America Online Time Warner (NYSE: AOL) shares moved up 59 cents to $43.90 ahead of Wednesday's earnings report. Yahoo (Nasdaq: YHOO) trimmed 31 cents to $17.31 after naming former Warner Brothers executive Terry Semel as its new chairman and chief executive officer.

Amazon.com (Nasdaq: AMZN) and eBay (Nasdaq: EBAY) gained 71 cents and $2.17 a share, respectively. CMGI (Nasdaq: CMGI) dipped 6 cents to $2.45.

High-speed Internet provider Excite@Home (Nasdaq: ATHM), off 80 cents to $4.07, warned Tuesday that it anticipates lower-than-expected first-quarter and full-year revenues because of weak advertising sales.

Among widely held PC stocks, Dell (Nasdaq: DELL) lost 81 cents to $26.30; Compaq (NYSE: CPQ) rose 35 cents to $18.33; Gateway (NYSE: GTW) shed 19 cents to $15.46 and Apple Computer (Nasdaq: AAPL) finished off $1.04 to $20.40.

Shares of software giant Computer Associates International (NYSE: CA) shot up $4.31 to $33.90 as the software company bucked the trend of depressing news and told analysts it would report stronger-than-expected results for its fourth quarter.

Microsoft (Nasdaq: MSFT) picked up 69 cents to $61.48. Oracle (Nasdaq: ORCL) inched up 26 cents to $16.22, and Sun Microsystems (Nasdaq: SUNW) finished off 30 cents to $16.04.

After reporting mediocre first-quarter results, Sprint (NYSE: FON), off $1.37 to $22.04, said during a conference call Tuesday that its second-quarter and full-year results are likely to miss estimates. Its wireless division, Sprint PCS (NYSE: PCS), up $1.73 to $24.73, also reported results.

Intel (Nasdaq: INTC) lost 24 cents to $26.06. Advanced Micro Devices (NYSE: AMD) clipped 50 cents to $23, and IBM (NYSE: IBM), which will report its first-quarter results Wednesday, closed up $2.95 to $99.70.

ZDII staff and Reuters contributed to this roundup.