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Consumer spending buoys markets

Wall Street ends the week with another nice rally, as the gross domestic product shows that the U.S. economy gained surprising momentum in the first quarter.

Blue-chip and technology stocks ended the week on strong gains Friday, with the Nasdaq composite gaining 41 points to 2,075.82 and the Dow Jones industrial average rallying up 118 points to finish at 10,810.05.

The gross domestic product (GDP) showed that the U.S. economy, boosted by stronger consumer spending, gained surprising momentum in the first quarter. The United States completed a record 10th year of unbroken expansion.

The Commerce Department said GDP increased at a stronger-than-expected 2 percent annual rate, accelerating from 1 percent in the final quarter of last year when the economy was edging ahead at its most sluggish pace in five and a half years.

"We are looking for evidence the economy is bottoming and starting to improve, and reports like this indicate we are not in a recession and probably not going to be in a recession," John Forelli, senior vice president at Independence Investment Associates, told Reuters. "The Fed has acted quickly enough with interest-rate cuts."

Intel moved up $1.54 to $30.18. Advanced Micro Devices picked up $2.49 to $30, and IBM closed up $2.46 to $116.20.

Shares of VeriSign surged $5.68 to $51.90 after the company topped estimates in the first quarter and said it was comfortable with Wall Street's projections for 2001.

AOL Time Warner inched up 48 cents to $49.99. Yahoo gained $1.24 to $19.50, while CMGI and eBay rose 7 cents and 87 cents a share, respectively. dropped 16 cents to $15.27.

Cisco Systems added 39 cents to $15.60. Lucent Technologies nudged up 12 cents to $10.80, and Nortel Networks dropped 34 cents to $14.84.

Corvis slid $1.49 to $6.40 despite having met estimates in its first-quarter report. The company announced a deal to provide Qwest Communications International with the equipment to build a nationwide network.

Among widely held PC issues, Dell tacked on 68 cents to $26, Compaq Computer rose $1.20 to $18.20, Gateway gained 75 cents to $19.50 and Apple Computer picked up $1.51 to $26.20.

Microsoft lost $2.01 to $67.12. Oracle closed up 24 cents to $17.14, and Sun Microsystems gained $1.60 to $17.38.

Semiconductor-equipment shares gained ground after Intel confirmed its plans to lay out $7.5 billion in capital expenditures this year.

Applied Materials rose $3.05 to $53.89. Lam Research tacked on $1.03 to $29.03, and Novellus Systems jumped $2.18 to $53.

Staff and Reuters contributed to this report.