Dow rallies; Nasdaq reverses losing streak

Stocks rise across the board to start the week on a high note led by the Dow Jones industrial average, as investors seem unfazed about the prospect of interest rate changes.

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Stocks rose across the board to start the week on a high note led by the Dow Jones industrial average, as investors seemed unfazed about the prospect of interest rate changes from a Federal Reserve meeting later this week.

The Nasdaq composite index rose 66.78 to 3,912.12, and the Standard & Poor's 500 index gained 13.77 to 1,455.25.

The Dow rose 138.24 to close at 10,542.99, led by Philip Morris and Johnson & Johnson.

"Biotech shares helped the Nasdaq comeback today," said Ed Nicoski, a market strategist at U.S. Bancorp Piper Jaffray. Biotechnology indices tracked by the Nasdaq and the Amex climbed 3.7 and 3 percent, respectively.

Nicoski also attributes the rise to typical "window dressing" by fund managers who want their funds to record gains as the quarter ends.

"You don't want to be caught at the end of the quarter with the Nasdaq higher and your fund still in cash," he said.

Nicoski said he believes the markets are not showing concern about any interest rate changes that might be announced by the Federal Reserve on Wednesday. "I think they will raise a quarter point if they raise at all, and I think that's already priced into the market," he said.

At the end of regular trading, Intel closed down 19 cents at $134.19. Microsoft rose $1.81 to $79.50.

The CNET tech index gained 18.77 to close at 2,829.10. Winners edged out losers, with 55 of the 97 stocks in the index rising and 42 falling.

Of the 18 sectors tracked, server hardware companies posted the strongest gains, rising 4 percent. Internet e-tailers recorded the biggest drops, sliding 2 percent.

Among members of the CNET tech index, Adaptec posted strong gains. Shares of the network equipment maker rose $2.31, or almost 13 percent, to $20.81.

Inktomi, a producer of Internet search engine software, did not fare as well. The company's shares fell $25.31, or 18 percent, to $115.06 on a volume of 20.4 million shares, more than five times the stock's average daily volume.

Yahoo announced today that it will use a rival search service and phase out the use of Inktomi. Analysts agreed that the announcement may have hurt Inktomi's pride, but also said the implications for its revenues and profitability are mild.

The Philadelphia semiconductor index fell 0.77 to 1,216.51, led by Motorola, which lost $2.38 to close at $30 after analysts released conflicting forecasts for the company's prospects.

In one of the first signs of consolidation in the highly competitive online food-delivery market, Net grocer Webvan bought rival company HomeGrocer.com in an all-stock deal valued at $1.2 billion. Webvan shares fell $1.41 to $7.31, while HomeGrocer dropped $1.22 to $6.88.