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Nasdaq, Dow gain as Fed raises rates

Stocks post broad gains despite a decision by the Federal Open Market Committee to raise short-term interest rates by a half-point.

2 min read
Stocks posted broad gains today despite a half-point rise in interest rates.

The Nasdaq composite index gained 109.92 to close at 3,717.57, and the Standard & Poor's 500 index climbed 13.68 to 1,466.04.

The Dow Jones industrial average rose 126.79 to 10,934.57, led by Hewlett-Packard and IBM.

The gains came despite a decision by the Federal Open Market Committee to raise short-term interest rates by 0.5 percent, a move that was widely expected.

At the end of regular trading, Intel was up $3.75 at $121.88, while Microsoft gained 13 cents to $69.50. Intel and Japan's Mitsubishi Electric said they will announce a joint development project tomorrow in Tokyo that could involve a mobile phone alliance.

The CNET tech index rose 78.18 to 2,940.04, led by shares of Lycos. Winners edged out losers, with 80 of the 99 stocks in the index rising and 19 falling.

Of the 18 sectors tracked, semiconductor companies posted the sharpest rise, climbing about 6 percent. Wireless companies were the day's only losers, falling a slim 0.45 percent.

Tickets.com, which sells tickets online, was the biggest percentage gainer on the Nasdaq Stock Market. The shares jumped $1.19, or 51 percent, to $3.50. Volume topped 1.4 million shares, more than eight times the stock's daily average. The company released earnings yesterday after the markets closed.

Among members of the CNET tech index, Lycos, Adobe Systems and Seagate Technology gained.

Adobe rose $13.88, or 13 percent, to $123.88, and Seagate climbed $5.56, or 12 percent, to $52.63. EMC said yesterday that it will purchase hard drives from IBM and increase its purchases from other makers such as Seagate.

Lycos rose $11.31, or 18 percent, to $72.94 on a volume of 25.3 million shares, more than eight times the stock's daily average, which made it the third most-actively traded stock on the Nasdaq. Terra Networks said it will buy Lycos in an all-stock deal valued at $12.5 billion.

Telecom giant Ericsson also saw heavy trading. The maker of wireless equipment rose $1.56 to $21.69 on a volume of 41.3 million shares, which is more than six times the stock's usual volume and made it the second most-actively traded stock on the Nasdaq behind Cisco Systems.

Mobile-phone operator Vodafone AirTouch said it has selected Ericsson as the main supplier of equipment for its new high-speed mobile phone network. Vodafone slid $1.31 to $41.56.

RealNetworks fell $1.94 to $36.06, and EMC dropped $1.50 to $131.50.

The Philadelphia semiconductor index rose 37.50 to 1,046.68, led by chip equipment maker National Semiconductor, which rose $4.81 to $57.88.

As most Internet companies are pulling or postponing their initial public offerings because of the general downturn and volatility of the stock market, CarsDirect.com is hitting the road less traveled by filing for an IPO.

Investors should keep their eyes on HP shares tomorrow; the company reported earnings after the bell.