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Dow, Nasdaq post triple-digit gains

News of a cooling economy causes investors to return to the markets with renewed enthusiasm.

News of a cooling economy caused investors to return to the markets with renewed enthusiasm.

The Nasdaq composite index rose 102.54, or nearly 3 percent, to 4,206.35, and the Standard & Poor's 500 index climbed 15.09 to 1,517.68.

The Dow Jones industrial average rose 112.09 to close at 11,215.10, led by J.P. Morgan, which rose $15.31 to $167.19.

Marquee names led the charge in the tech sector. At the end of regular trading, Dell Computer rose $3.69 to $43.63. Cisco Systems closed up $2.06 at $68.63, and Intel climbed $1.38 to $74.88. Microsoft dropped 19 cents to $69.81.

"The market has been struggling for a rally, and maybe we're getting it," said Jeff Logsdon, director of research at WR Hambrecht. "The downturn last April came out of a panic in the technology sector and interest rate concerns...Those are far less concerns right now. Fundamentals are good, interest rates are better, and it looks like the Fed is not going to be active for now."

U.S. factory orders dropped 7.50 percent in July compared to an increase of 5.20 percent in June. Decreased demand for airplanes, electronics and communications equipment helped set the record drop.

In a separate report, the Labor Department said the number of people filing new claims for unemployment benefits last week fell by 3,000 to 318,000.

The factory report, combined with news of lackluster retail sales in August, provided further evidence that the economy is slowing, and that the Federal Reserve may not have to raise interest rates further. That may have eased investors' fears that the economy was headed toward overheating, pushing markets up.

The CNET tech index gained 63.12 to close at 3,373.50. Winners soundly thumped losers, with 64 of the 97 stocks in the index rising and 33 falling.

Almost all the 18 sectors tracked by CNET Investor closed higher. Companies that provide all things wireless posted the sharpest gains, rising 4 percent. Internet content companies were the day's only losers, slipping a slim 0.42 percent.

Qiao Xing Universal Telephone was the biggest percentage gainer on the Nasdaq. The shares jumped $8.56, or almost 72 percent, to $20.50. Volume topped 6 million shares, more than 67 times the stock's average daily volume of about 91,000.

The shares soared after the telephone maker said China's government approved it as a developer of mobile phones based on Qualcomm technology. Qualcomm rose $1.56 to $59.88.

Among members of the CNET tech index, Lexmark International, a maker of computer printers, rose $8, or 13 percent, to $67.50.

Salomon Smith Barney analyst John Jones raised his rating on Lexmark to ''buy'' from ''neutral.'' He boosted his price target to $85 from $55.

On a more disappointing note, several analyst downgrades in the Internet consulting sector pulled down many companies in the increasingly competitive niche.

Scient fell $3.50, or 11 percent, to $27.06. Viant closed at $13.88, down 63 cents. US Interactive dropped 81 cents, or 9 percent, to $7.81.

Earnings news hit shares of Micros Systems, which fell $5.44, or nearly 24 percent, to $17.56. The company posted a fourth-quarter loss of 45 cents a share, a drop from last year's profit of 58 cents. Wall Street expected the company to lose 17 cents a share for the quarter, according to a survey of three analysts by First Call/Thomson Financial.

The company, which makes computer systems and software for restaurants and hotels, attributed the earnings shortfall to a purchasing slowdown of computer equipment in the hospitality industry. It said it expected the trend to continue until the end of the year.

Hutchinson Technology rose $5.31, or almost 29 percent, to $23.75 on a volume of nearly 3.9 million shares, nearly 18 times more than the stock's average volume. Hutchinson, a supplier of suspension assemblies for disk drives, announced that in the first nine weeks of its fourth quarter, the company earned approximately $200,000, or 1 cent a share. In the same quarter of 1999, Hutchinson had a loss of $2.1 million, or 9 cents.

Wall Street expects the company to lose 22 cents a share for the quarter ended on Sept. 24., the consensus estimate of four analysts surveyed by First Call.

The Philadelphia semiconductor index climbed 34.67, or 3 percent, to 1,152.98, led by chipmaker Altera, which gained $4.44 to close at $64.81. Chip designer Rambus also rose $5.50 to $81.69.