Technology stocks posted decent gains for the second day in a row Wednesday as the Nasdaq composite rallied up 83 points to 2,524.18. The Dow Jones industrial average picked up 32 points to finish at 10,604.27.
“There is the feeling that techs suffered a great deal and you take your profits in the old economy and move into the new economy,” said Milton Ezrati, a senior economist and strategist at Lord Abbett. “There is a little wishful thinking that the old pattern will return, and we think it's incorrect.”
Cisco Systems (Nasdaq: CSCO) fell 88 cents to $36.25 after CIBC World Markets analyst Steve Kamman said that the networking giant's glory days may be over. Cisco CEO John Chambers acknowledged the current quarter was a little more difficult, but emphasized the company's long-term prospects. A whooping 212 million shares of Cisco exchanged hands in volatile trading.
Kamman upgraded Lucent (NYSE: LU), up 81 cents to $17.63, to "buy" from "hold" based on its current valuation, and called the company "an attractive harbor in what looks to be a choppy year for the sector."
Kamman downgraded other networking equipment companies including Juniper Networks (Nasdaq: JNPR), which was dropped to a "buy" rating from "strong buy," and Redback Networks (Nasdaq: RBAK), cut to "hold" from "buy." Juniper shares closed up $2.13 to $119.31 and Redback gained $5.44 to $40.88.
Slumping handset sales, semiconductor weakness and a double-shot of warnings give analysts little to cheer about, ahead of Motorola's (NYSE: MOT) fourth quarter earnings. But the stock closed up 50 cents to $21.19. Motorola's conference call will be held Thursday morning.
Among widely held PC stocks, Dell (DELL) added $1.56 to $21.31; Compaq (CPQ) rose $1 to $18; Gateway (GTW) moved up $1.07 to $19.94 and Apple Computer (AAPL) closed off 63 cents to $16.56.
BEA Systems (Nasdaq: BEAS)gained $7.13 to $56.25 after inking a 3-year licensing deal with financial giant Charles Schwab & Co.
Semiconductor equipment maker Varian Semiconductor (Nasdaq: VSEA) picked up $1.31 to $25.44 even though it cut its first quarter revenue numbers due to delivery delays and a slowing chip sector.
Microsoft (MSFT) rose $1.06 to $52.88. Oracle (ORCL) tacked on $1.25 to $32.75 while Sun Microsystems (SUNW) trimmed 38 cents to finish at $29.06.
Yahoo (YHOO) inched up 38 cents to $30.50 ahead of its earnings report. Amazon.com (AMZN) and eBay (EBAY) picked up 13 cents and $5.94 a share, respectively, while America Online (AOL) closed up $2.04 to $44.89.
Intel (INTC) gained 75 cents to $33. Advanced Micro Devices (AMD) rose 38 cents to $17.13 and IBM (IBM) finished up 88 cents to $93.44.