This afternoon, the Dow Jones Industrial Average rocketed 191.52 points or 2.06 percent higher, to 9,467.4, while the technology-laden Nasdaq Composite Index soared 1.23 percent or 27.84 points, to 2,293.04.
After several weeks in which technology bellwethers, including Dell, and the broader markets have been battered because of an anticipated slowdown in the PC market, today's announcement came as a healthy shot in the arm.
Eight of the ten most active stocks on the Nasdaq closed higher. At one point in late afternoon trading, the Nasdaq shed all its gains and fell into negative territory, but a closing rally sent the index surging.
IBM jumped 2.32 percent and was the third most actively traded stock on the New York Stock Exchange today, with 10.7 million shares changing hands. Dell got a jump-start from the announcement earlier but closed only 1.16 percent higher. Dell stock was the most actively traded issue on the Nasdaq, with 41.3 million shares changing hands.
Early in the day, the announcement created an updraft that benefited even rival computer maker Compaq Computer, which hovered in positive territory but then tumbled 2.21 percent.
The impact of the deal had a somewhat subdued effect on Internet stocks, which posted only modest gains and quite a few losses.
Yahoo, which was climbing earlier, slipped 1.26 percent. Excite and Infoseek gained 2.23 percent and 1.49 percent, respectively. America Online shed 0.65 percent. Preview Travel slipped 3.98 percent after climbing 1.14 percent this morning. And Onsale also gave back morning gains to stumble 5.83 percent.