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. Amazon.com 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.