Technology stocks led a broad market rally Thursday, breaking a string of losses.
"It's really because we have had such a compression of valuations and such pessimism in the market that we were bound to have a sharp snap back," said Charles Lemonides at M&R Capital Management, which oversees $300 million. "It may or may not be long-lasting."
The tech-heavy Nasdaq composite index rose 146.29 to 1,785.09, snapping a run of three consecutive losing sessions and posting its third-highest percentage increase in a single day. The S&P 500 gained 48.21 to 1,151.46. The Dow Jones industrial average closed at 9,918.05, up 402.63, the second-best point gain ever for the blue-chip index.
Inter@ctive Week's @100 Index increased 151.76 to 1,987.13.
Dell Computer (Nasdaq: DELL) picked up $3.06 to $25.25 after it told analysts it would meet expectations and post a profit of 17 cents per share on sales of $8 billion in the first quarter.
Other PC-related stocks rose, including Compaq Computer (NYSE: CPQ), up $1.36 to $17.16; Apple Computer (Nasdaq: AAPL), gaining $1.37 to $20.87; Intel, advancing $3 to $25.63; Microsoft (Nasdaq: MSFT), moving up $4.81 to $56.75; and Advanced Micro Devices (NYSE: AMD), up $2.28 to $23.02.
Yahoo (Nasdaq: YHOO) shares soared $3 to $15.44 after Lehman Brothers analyst Holly Becker encouraged investors to buy the stock. Becker said in a research note Yahoo may be hitting its bottom, and things could begin to pick up again.
Akamai Technologies (Nasdaq: AKAM) said Wednesday it would report a narrower-than-expected loss, but warned revenues would fall short of expectations, and announced plans to lay off 14 percent of its work force. Analysts downgraded the stock, but shares rose $1.50 to $7.50.
Shares of WebMethods (Nasdaq: WEBM) also managed to rise $2 to $19, despite news Thursday that the company would miss fourth-quarter expectations.
BMC Software (NYSE: BMC) shot up $4.22 to $23.30. The maker of software for mainframes and client-server networks said after market close that it sees better-than-expected quarterly results.
XO Communications (Nasdaq: XOXO) gained $1.45 to $4.23 after the company said it has enough cash to fund operations into the first half of 2002.
IKOS Systems (Nasdaq: IKOS) slid $2.44 to $7.56. The maker of systems used by designers of integrated circuits said it would miss analysts' second-quarter estimates.
Aspen Technology (Nasdaq: AZPN) tumbled $6.02 to $12.98, following the business-software vendor's earnings warning.
An earnings warning also shook shareholders of Phoenix Technologies (Nasdaq: PTEC), which fell $3.19 to $8.69.
Among other heavily traded tech stocks, Cisco Systems (Nasdaq: CSCO) rose $1.25 to $14.94, Lucent Technologies (NYSE: LU) picked up $1.19 to $7.94, and EMC (NYSE: EMC) advanced $4.80 to $31.75.
ZDII staff and Reuters contributed to this roundup.