Techs stage strong close as Dow falls
U.S. markets end the day mixed as the Dow dips in afternoon trading, while the Nasdaq remains afloat, buoyed by technology shares.
The Dow Jones Industrial Average closed down 24.34 points, or 0.22 percent, at 11,007.25 as the tech-heavy Nasdaq Composite Index finished the day up 22.77 points, or 0.91 percent, at 2,526.39. Drug makers such as Johnson & Johnson pulled the Dow lower after it was found the company trades at a high price relative to its earnings, according to Bloomberg.
In the technology sector, shares of Lycos soared 17.6 percent after reports from the Wall Street Journal said USA Networks may abandon its plan to acquire the Massachusetts-based Internet directory, according to Bloomberg News. Lycos shares closed ahead 15.75 points at 105.25.
Most Internet issues traded stronger in the afternoon, led by Lycos, and ended in positive territory. Shares of America Online rose 20.56 to 128.75, Yahoo gained 8.25 to 155.68, and Infoseek rose 1.25 to 52.37. Excite dipped 2.62 to 158.93 at the close.
Online retailers eBay and Amazon.com continued their rise in the afternoon. Shares of eBay jumped 16.68 points, or 9.44 percent, to 193.37, and Amazon.com gained 10.5 to 146.87. Online brokers also ended stronger. E*Trade advanced 9.43 to 119.81, and Ameritrade rose 6.75 to 120.5.
General Electric's NBC television unit today said it would merge several of its Internet assets with Xoom.com, an e-commerce direct marketer, and Snap.com, a joint venture between NBC and CNET, to create NBC Internet (NBCi), according to Reuters. The new company will be NBC's exclusive Internet media network, providing Web search capabilities, email, e-commerce, and community services, the companies said. (CNET is the publisher of News.com.)
Shares of Xoom.com jumped 8.99 percent, up 6.75 to 81.87, while GE slipped 1.18 to108.75.
Shares of Nextel Communications rose after Microsoft announced it will take a stake in the telecom company worth $600 million. As reported, the software giant said in a statement that it's also in a wireless deal with Nextel in which Nextel will be Microsoft's first provider for its new wireless portal via its MSN network of Web services.
Nextel rose 0.56 to 36.93, and Microsoft closed up 0.62 points at 79.68.
Major computer makers, which were making gains across the board in the afternoon, ended the day on a strong note. IBM closed ahead 1.5 at 218.75, Hewlett-Packard rose 0.43 to 80.37, and Dell rose 2.06 to 42.25. Gateway jumped 2.56 to 66.75, and Compaq gained 1.5 to 26.25. Apple fell 0.62 to 45.25.
Separately, analysts said that Compaq is expected to cut its number of distributors to about four from as many as 40 to streamline costs and manage inventory, according to Bloomberg. The move, which is the first big decision by chairman Ben Rosen since he ousted chief executive Eckhard Pfeiffer last month, could come as early as today, analyst Kurt King of NationsBanc Montgomery Securities told Bloomberg.
Bloomberg and Reuters contributed to this report.