MIDDAY MARKETS: Techs post modest gains

Major merger news and upgrades on stocks ending their post-IPO quiet periods helped techs sustain a modest rally at midday Tuesday. The Nasdaq rose 12.29 to 2,855.40 and the Dow Jones industrial average gained 2.53 to 11,080.98.

Without economic news to amplify interest rate concerns or optimism, techs were moving in mixed directions on news.

Viacom Inc., (NYSE: VIA), the name behind MTV and Paramount Pictures, Tuesday merged with CBS Corp. for $37 billion in stock -- a combination billed as the largest media transaction ever. Viacom shares were up 7 percent, or 3 1/4 to 48 9/16. CBS shares were up 3 percent, or 1 7/16 to 50 3/8.

Companies whose quiet periods have ended usually see a lot of action when underwriters start shouting "buy" as they initiate coverage of the stocks. Though HotJobs.com (Nasdaq: HOTJ), up 4 1/4 to 34 1/4, and Red Hat followed that pattern today, shares in several of this summer's IPOs started heading south instead. Red Hat Inc. (Nasdaq: RHAT), up 6 7/16 to 91 3/8, also announced that Gateway (NYSE: GTW), up 1 11/16 to 100 3/16, will become an authorized reseller of its software and it will open a new division in Japan.

Other computer makers were mixed. IBM Corp. (NYSE: IBM) was down 7/64 to 128 3/4, Dell Computer Corp. (Nasdaq: DELL) up 1/8 to 49 9/16, Compaq Computer Corp. (NYSE: CPQ) fell 1/8 to 23 1/8, and Apple Computer Inc. (Nasdaq: AAPL) gained 2 7/8 to 76 3/8.

Digital Island Inc. (Nasdaq: ISLD) was up a whopping 33 percent, or 6 3/16 to 25 1/16, after said it planned to build an Internet-based audio and video transmission network that would improve international delivery of Web broadcasts and its stock surged 36 percent.

Amazon.com (Nasdaq: AMZN), up 15/16 to 63 3/8, said it has named Warren C. Jenson as its senior vice president and chief financial officer. Jenson is the second management addition in recent days.

Yahoo! Inc. (Nasdaq:YHOO) grew 5/16 to 155 5/16 and America Online Inc. (NYSE: AOL) sank 1 5/8 to 95 3/16. Other Net notables included: Lycos Inc. (Nasdaq: LCOS), down 3/4 to 44, Infoseek Corp. (Nasdaq: SEEK), up 5/8 to 31 5/8, Excite@Home (Nasdaq: ATHM), down 3/4 to 40 3/16, and Mindspring (Nasdaq: MSPG) up 1/16 to 28 15/16. CMGI Inc. (Nasdaq: CMGI) rose 7/16 to 86 11/16.

Cisco Systems Inc. (Nasdaq: CSCO) rose 7/32 to 71 5/32. Lucent Technologies (NYSE: LU) gained 1 67, and 3Com Corp. (Nasdaq: COMS) sank 5/16 to 26 3/4.

Microsoft Corp. (Nasdaq: MSFT) added 1/32 to 95 29/32, Intel Corp. (Nasdaq: INTC) dropped 1 9/16 to 87 3/4, and Advanced Micro Devices Inc. (NYSE: AMD) added 1 1/4 to 22 1/4.

Oracle Corp. (Nasdaq: ORCL) skipped up 1 15/16 to 43 7/16 , AT&T Corp. (NYSE: T) grew 7/16 to 48 9/16 and Sun Microsystems Inc. (Nasdaq: SUNW) grew 3/4 to 85 1/4.