Techs rally on chip hopes
Upbeat comments about the chip sector spur gains, and market analysts debate whether such recent gains will last.
The Dow Jones industrial average gained 129.88 points, or 1.3 percent, to close at 9,893.84 , and the Nasdaq gained 58.20 points, or about 3 percent, to finish at 1,963.10.
"We are calling the order bottom for the semiconductor capital equipment industry. We expect bookings will bottom during the month of December, with a revenue bottom to follow in February, 2002," said UBS Warburg analyst Byron Walker.
Meanwhile, market analysts were discussing whether the possible stock market bottom is preceding an economic rebound.
"We are likely to see very trendless markets this week, with economic (news) determining the outcome," said FAC Equities analyst Hugh Johnson in a research note debating whether the recession will last beyond the fourth quarter.
That debate was a common theme in research reports on Wall Street on Tuesday. "We still believe that any kind of economic rebound we are likely to see is artificial, and at the moment we are skeptical as to how long it can last," said Arnhold & S. Bleichroeder economist James Padinha.
On the technology front, Applied Materials rose $3.16, or 8 percent to $42.43, helping to lift CNET's Semiconductor Cap Equipment index around 6 percent. Avant surged $6.90, or 63 percent to $17.85 on news that Synopsys would acquire the company for $769 million. Synopsys was off $2.63 to $53.03.
Cisco Systems was most active on the Nasdaq, up 66 cents to $20.52. Cisco hosted its analyst meeting Tuesday, in which CEO John Chambers said November orders were on target. He also said the company is still having difficulty forecasting sales and demand beyond one or two quarters out.
Cisco announced new product developments and a couple of new contracts. Telecommunications equipment and networking stocks were among the most active. Extreme Networks gained $1.80, or 12 percent, to $16.76; Ciena was up $1.67, or 10 percent, to $18.73; and Juniper Networks added $2.02, or 9 percent, to $25.24.
Sun Microsystems was up 24 cents to $13.74, and Intel rose 82 cents to $32.86. Both companies are expected to hold midquarter conference calls Thursday.
Among other active issues, AT&T rose 15 cents to $17.59. Ma Bell is expected to get bids for its broadband unit.
Other players involved in the negotiations traded flat. Comcast was level at $38.36. Cox Communications was up 81 cents to $39.17. AOL Time Warner was up $1.17 to $34.75, and Microsoft rose $1.23 to $66.
Staff and Reuters contributed to this report.