Tech stocks stayed positive Tuesday after the Federal Reserve did the expected in raising interest rates.
The Nasdaq Composite Index closed at 3717.57, up 109.92. The S&P 500 rose 13.68 to 1,466.04. The Dow Jones Industrial Average gained 126.79 to 10,934.57. Inter@ctive Week's @100 Index gained 99.23 to 5,082.56.
On Tuesday afternoon, the Fed announced it had raised the federal funds target rate, or the rate for overnight bank lending, to 6.5 percent from 6.0 percent. The Fed also said it had increased the discount rate, or the rate for bank loans from the Fed, to 6.0 percent from 5.5 percent. In that announcement, the Fed also said it saw inflation risks ahead.
"This demonstrates the Fed is clearly and aggressively intensifying its fight to combat both excessive growth in the economy and inflationary pressures," said Philip Orlando, chief investment officer of Value Line's asset management division.
Downtrodden stocks were rebounding Tuesday. Inprise (Nasdaq: INPR) and Corel (Nasdaq: CORL) said their merger is off. Shares of Corel surged 19/32 to 6, and Inprise rose 9/32 to 6 1/8 on the news.
Neoforma.com (Nasdaq: NEOF), up 23/32 to 9 7/8 announced Monday it may terminate its merger with Eclipsys (Nasdaq: ECLP), down 3/16 to 13 1/16 and HEALTHvision.
Meanwhile, an overwhelming majority of Newbridge Networks (NYSE: NN), up 7/8 to 42 5/16 after shareholders voted in favor of the network equipment developer's acquisition by Alcatel (NYSE: ALA), up 1 9/16 to 53 3/8.
Another merger was also in the works; Efficient Networks (Nasdaq: EFNT), up 5 3/8 to 53 7/8, agreed Tuesday to buy Network TeleSystems, a provider of broadband client services software, for about $19.4 million.
Saudi Arabia's billionaire Prince Alwaleed bin Talal also had an affect on stocks after announcing he recently invested $1 billion in 15 U.S. companies, including: Amazon.com Inc (Nasdaq: AMZN), up 3 to 59 1/16; eBay (Nasdaq: EBAY), up 7 1/4 to 134 3/4, Internet Capital Group Inc (Nasdaq: ICGE), up 5 7/16 to 35 9/16; Priceline.com (Nasdaq: PCLN), up 3 5/8 to 54 1/16; InfoSpace Inc (Nasdaq:INSP), up 2 to 60 and Doubleclick Inc (Nasdaq: DCLK), up 5 1/16 to 59 13/16. He also bought large stakes in WorldCom (Nasdaq: WCOM), up 1 9/16 to 43 and AT&T (NYSE: T), up 3/16 to 38 7/8. He already has a large investment in AOL (NYSE: AOL), down 9/16 to 57 7/8.
Other Internet companies on the rise Tuesday included Lycos (Nasdaq: LCOS), which shot up another 11 to 72 5/8, though confirmation of a deal with Terra (Nasdaq: TRRA), down 3 5/16 to 53 9/16, had yet to be announced. Yahoo (Nasdaq: YHOO) was up 5 5/8 to 135 5/8.
Vignette (Nasdaq: VIGN), up 2 1/2 to 48 1/2, said sales are expected to increase nearly threefold to $265 million in calendar 2000 from $89.2 million last year.
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