Analysts were impressed by the tech sector's strength following Tuesday's triple-digit gains. In recent months, most of these run-ups were followed by some quick profit taking.
"Investors are starting to feel that perhaps we have found a bottom, and we are starting to build a base," Guy Truicko, equity portfolio manager at Unity Management, told Reuters. "The worst of it may be ending. We might have a little bit more downside, but it doesn't look like a lot more."
The bulk of Wednesday's technology gains followed an upgrade for the semiconductor sector from Salomon Smith Barney analyst John Joseph.
Intel closed up $2.76 to $27.53, and fellow chipmakers rallied after the influential Wall Street analyst raised his ratings on a host of stocks. Joseph argued semiconductor stocks could gain despite sluggish fundamentals. The conclusion counters a bearish report from Lehman Brothers on Monday. Applied Micro Circuits moved up $3.01 to $19.39 while Micron Electronics and National Semiconductor shot up $3.45 and $1.85 a share, respectively.
Motorola shares fell 10 cents to $12.90 after missing estimates in its latest quarter, posting on Tuesday its first operating loss in more than 15 years. It caused a stir Wednesday by predicting an alarming retro trend: a return to the 1970s economy. Motorola CEO Chris Galvin said in a conference call today that the technology sector is in a recession and "reflects the boom and bust of the high-tech cycles of '84-'85, or perhaps even the '74-'75 time frame."
Among widely held PC stocks, Dell inched up 49 cents to $26.75, Compaq Computer rose 25 cents to $17.60, Gateway trimmed 48 cents to $15 and Apple Computer closed off 24 cents to $21.80.
Another disappointment for investors came from EMC, off $2.19 to $32.21 after the data-storage giant said its first-quarter earnings will fall short of Wall Street estimates amid a slowdown in information-technology spending. The company also cut its growth projections for 2001. Veritas gained $1.44 to $58.75.
Microsoft picked up $1.32 to $61, while Oracle and Sun Microsystems added 56 cents and $1.66 a share, respectively.
AOL Time Warner gained $1.19 to $41.20. Yahoo clipped 16 cents to $15.86, while Amazon.com and CMGI moved up $1.31 and 20 cents a share, respectively. eBay closed off 28 cents to $39.17.
Cisco Systems shot up $1.54 to $17.40. Lucent Technologies tacked on 6 cents to $7.28, and Nortel Networks finished up 3 cents to $14.48.
Staff and Reuters contributed to this report.