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MIDDAY MARKETS: Techs cheer mergers, stock splits

Technology stocks were strong at midday Monday after merger and stock split news boosted shares. The Nasdaq added 38 points to 3,791, but the Dow Jones industrial average fell 45 points to 11,211 ahead of Tuesday's Federal Reserve meeting.

Networking-related issues were active as Cisco Systems Inc. (Nasdaq: CSCO) agreed on Monday to buy the optical networking systems business of Italy's Pirelli SpA for $2.15 billion in stock. The deal gives Cisco an entry into the dense wave division multiplexing (DWDM) market.

Cisco gained 2 to 101 11/16, but Ciena Corp. (Nasdaq: CIEN), which competes with Pirelli, fell 2 to 61 1/2. Other networking players included Nortel (NYSE: NT), up 3 5/16 to 93 3/4, Tellabs (Nasdaq: TLAB), up 1 1/16 to 64 5/16, and Lucent (NYSE: LU), up 1 1/2 to 82.

In the communications chip space, Conexant (Nasdaq: CNXT) fell 4 9/16 to 65 7/16 after announcing plans to buy Maker Communications (Nasdaq: MAKR), which jumped 6 to 40 1/16.

Chip equipment makers were also active as Novellus (Nasdaq: NVLS) surged more than 24 percent Monday after the chip equipment maker said its fourth quarter earnings would "substantially exceed" estimates.

Novellus was up 20 61/64 to 106 1/8. Applied Materials (Nasdaq: AMAT) was up 6 5/8 to 117 3/8, KLA-Tencor (Nasdaq: KLAC) added 5 7/16 to 98 1/2 and Lam Research (Nasdaq: LRCX) gained 8 15/16 to 98 1/2.

Red Hat (Nasdaq: RHAT) was up 9 1/8 to 262 despite missing estimates for its latest quarter. News of a stock split minimized any damage. Fellow Linux stock VA Linux (Nasdaq: LNUX) was off 6 5/8 to 236 1/4.

Juno (Nasdaq: JWEB) was up 5 to 21 3/8, or 30 percent, on news it would offer free Internet service. NetZero (Nasdaq: NZRO), which also offers free access, slipped 7/8 to 24 1/8. America Online (NYSE: AOL) was up 1 7/8 to 86 7/8.

Among other Internet issues, Yahoo (Nasdaq: YHOO) was up 6 to 356, Lycos (Nasdaq: LCOS) gained 4 5/16 to 85 1/4, NBCi (Nasdaq: NBCI) added 2 3/8 to 73 1/4 and CMGI (Nasdaq: CMGI) jumped 9 11/16 to 221 1/2. (Nasdaq: AMZN) gained 4 7/16 to 98 1/2.

Elsewhere on the tech front, Dell Computer Corp. (Nasdaq: DELL) was up 1 7/8 to 47 7/16 after JP Morgan upped the stock to a "buy" from a "market performer."

"We believe Dell could have an edge among early adopters (of Windows 2000) in corporate America, in the high-end consumer market and in small and medium business," the securities house said in a report.

Compaq Computer Corp. (NYSE: CPQ) shed 3/8 to 25 3/8 and IBM Corp. (NYSE: IBM) was unchanged at 110. Intel Corp. (Nasdaq: INTC) slipped 1/2 to 81 9/16 and Microsoft slipped 1 1/2 to 113 3/4.

Oracle (Nasdaq: ORCL) continued recent gains, up 6 1/16 to 96 3/4, after announcing a stock split.