Tech bellwethers lead Nasdaq higher
After a sluggish start, technology stocks close higher on hopes that an economic rebound is on deck.
The Nasdaq Stock Market reversed a midday deficit to gain 52.05 points, or 2.46 percent, to 2,168.20. Gains by the tech-laden Nasdaq padded the index's best month. In April, the Nasdaq gained 15 percent. As for the blue chips, the Dow added 163.37 points, or 1.52 percent, to 10,898.34, largely because of strong results from Procter & Gamble.
"April was a great month and we've been able to hold our ground. There's a feeling the market has found its bottom," said Michael Lyons, senior trader at investment firm Morgan Stanley. "The stocks that took the most punishment are coming into vogue again."
Analysts were upbeat on news that the manufacturing sector is stabilizing even though it's still mired in a slump. The U.S. manufacturing sector shrank in April for the ninth month in a row, according to the National Association of Purchasing Management report. Although the results were sluggish, the key index of business activity rose for the third month in a row.
Tech bellwethers gained across the board. Microsoft rose $2.42 to $70.17. Cisco Systems gained 81 cents to $17.79, and Intel was up 27 cents to $31.18.
Priceline.com rose $1.74 to $6.59, or 36 percent, after Goldman Sachs upgraded the stock and predicted strong results from the company's first quarter. After the bell, Priceline didn't disappoint, indicating that it will post a profit in the second quarter.
Other Internet stocks also fared well. Amazon was up $1.11 to $16.89, AOL Time Warner gained $1.46 to $51.96 and Yahoo was up $2.19 to $22.37.
On the earnings front, Williams Communications, up 3 cents to $4.55, missed first-quarter estimates by a wide margin, as its loss widened substantially from a year ago.
Wireless telephone company Nextel Communications, up $2.44 to $18.69, or 15 percent, posted a smaller first-quarter loss amid the slowing U.S. economy and said it would cut 5 percent of its workers.
Among CNET Networks indexes, server hardware stocks showed the best gains, up 8.58 percent, largely because of Sun Microsystems, which surged $1.86 to $18.98. Storage stocks gained 6 percent, largely because of Brocade Communications Systems, which gained $4.97 to $42.96, or 14 percent.
Staff and Reuters contributed to this roundup.