MIDDAY MARKETS: PPI inspires tech rally

Positive news from the PPI report drove investors into technology issues at midday Friday. The Nasdaq climbed 41.74 to 4,216.60, and the Dow Jones industrial average shed 6.71 to 10,782.00.

The Inter@ctive Week @Net Index rose 13 to 539.97.

The June producer price index, a measure of U.S. wholesale-level inflation, offered some more evidence of a down-shifting economy.

Another report on retail sales was not as encouraging; led by a surge in car sales and gasoline prices, U.S. retail sales rose 0.5 percent in June,their biggest gain since February.

On the IPO front, shares of OmniVision (Nasdaq: OVTI), a maker of for digital cameras and other devices, surged 19 11/16 to 32 11/16. Shares priced at $13.

3Com (Nasdaq: COMS), up 3 1/8 to 67 7/16, said Friday that the final Palm (Nasdaq: PALM), up 2 1/4 to 38 13/16 distribution ratio is 1.484 shares of Palm for each share of 3Com.

JFAX.com (Nasdaq: JFAX), up 3/16 to 1 11/16, and eFax.com (Nasdaq: EFAX), down 5/32 to 7/8 merged.

Online grocer Webvan (Nasdaq: WBVN), down 1 27/32 to 7 15/32, and its merger partner HomeGrocer.com (Nasdaq: HOMG), down 1 1/8 to 6 7/8, both tumbled after reporting quarterly results.

Vitesse Semiconductor (Nasdaq: VTSS) was also falling fast, down 9 3/16 to 76 7/8, after reporting its third quarter. Gateway (NYSE: GTW) was down 3 7/16 to 67 1/16 as its results didn't pass muster with analysts.

On the brighter side of earnings news, Chip maker Altera (Nasdaq: ALTR) surged 8 1/8 to 119 3/16 after reporting second-quarter earnings.

Intel (Nasdaq: INTC) rose 1 1/16 to 144 1/4. Microsoft (Nasdaq: MSFT) was down 1 to 78 15/168.

Yahoo! (Nasdaq: YHOO) rose 5 to 127 9/16, Amazon (Nasdaq: AMZN) gained 5 3/8 to 40 3/8 and AOL (NYSE: AOL) was up 2 1/4 to 60 1/2.

Among other leading tech issues: Cisco (Nasdaq: CSCO) gained 2 1/2 to 67 3/4, Sun Microsystems (Nasdaq: SUNW) was up 35/64 to 94 31/64 and Oracle (Nasdaq: ORCL) lost 1/8 to 75 5/8.