Tech stocks post modest gains

The Nasdaq composite index gained 38.20, or almost 2 percent, to 2,067.32, while the Dow Jones industrial average was up 134.27 to 10,606.39.

Trading was flat earlier in the session as Wall Street digested earnings reports and economic news. On the economic front, U.S. industrial production fell for the ninth straight month in June, according to new data from the Federal Reserve. Overall output slipped by a larger-than-expected 0.7 percent in June, while manufacturing production dropped 0.8 percent.

Meanwhile, Federal Reserve Chairman Alan Greenspan is slated to testify before Congress Wednesday regarding the state of the economy.

"What I'm looking for is for the market to hold together in a reasonable manner--in other words, not collapse," wrote Raymond James strategist Ralph Bloch in a research note.

After the closing bell, Intel managed to top Wall Street estimates. Prior to the report, however, some analysts were skeptical. ABN Amro analyst Paul Leming cut his rating on the stock from "hold" to "reduce," saying he suspected Intel would "noticeably" miss forecasts. Intel shares were up 77 cents to $29.90.

Intel's results follow word from semiconductor equipment maker Novellus Systems that "business conditions remain exceptionally weak." ABM Amro analyst Nikolay Tishchenko lowered his predictions for the capital-equipment market for 2002, saying that in the absence of any seasonal uptick in PC and cellular-phone sales, growth could be limited to the single digits. He cut his ratings on Applied Materials, Cymer, KLA-Tencor, Lam Research and Novellus from "buy" to "add."

Nevertheless, investors speculated that the worst was over. Applied Materials was up $2.62 to $44.57, Cymer gained 70 cents to $23.11, KLA-Tencor was up $2.54 to $49.20 and Lam Research was up 95 cents to $25.72. Novellus was up $2.48 to $48.85. CNET's semiconductor index was up almost 3 percent and CNET's semiconductor capital equipment index was up almost 5 percent.

Among other stocks in the news, Hewlett-Packard officials said the company has seen "healthy" participation rates for its recent cost-cutting measures, which included asking employees to take voluntary pay cuts or vacations. HP shares were unchanged at $26.40.

Schwab, the No. 1 U.S. discount and online brokerage house, said second-quarter operating earnings fell 51 percent as the stock market slump cut into trading and commission revenues. Shares were up $1.04 to $15.49.

Symbol Technologies fell $5.50 to $12.95 after the company warned investors that earnings would fall short of expectations at 3 cents per share for the second quarter. Analysts had been looking for Symbol, which makes bar-code scanners, to report a profit of 15 cents per share.

Among leading volume movers, Cisco gained 8 cents to $17.79, Sun Microsystems was down 42 cents to $14.59, Microsoft gained 64 cents to $71.82, and Oracle gained 80 cents to $19.50.

News.com staff and Reuters contributed to this roundup.